Personal Finance 1st Edition by Jack R. Kapoor

Exercise 8

Analyzing Opportunity Costs Using Credit. Think about the last three major purchases you made. (Obj. 1)

a.     Did you pay cash? If so, why?

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b.     If you paid cash, what opportunity costs were associated with the purchase?

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c.      Did you use credit? If so, why?

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d.     What were the financial and psychological opportunity costs of using credit?

Step 1 of 4

a. Paid cash. Cash was available, and it is cheaper to pay cash than to pay finance charges on a purchase.