Question
Which of the following modifications to the list of assets and liabilities below would result in a net worth of 100,000 Recreational Vehicle valued at 110,000. Car valued at 27,000 Medical bills totaling 8,700 Loan balance of 80,000. Savings of 5,000 Retirement fund of 50,000 Credit card balance of 2,300 a. recreational vehicle value decreasing to 100,000 b. borrowing 10,000 more in loans c. withdrawing 20,000 from the retirement fund d. adding 1,000 in credit card debt Please select the best answer from the choices provided A B D
Answer
4.1
(322 Votes)
Vincent
Master · Tutor for 5 years
Answer
D
Explanation
Assets:- Recreational Vehicle:
- Savings:
Total Assets =
27,000 + \
50,000 = \
- Loan balance:
Total Liabilities =
80,000 + \
91,000\)Net Worth = Total Assets - Total Liabilities =
91,000 = \
. We need to find out which modification will result in a net worth of
:This would reduce the total assets by
91,000\), which is not the target net worth.b. Borrowing
, making the new net worth
10,000 = \
from the retirement fund:This would reduce the total assets by
81,000\), which is not the target net worth.d. Adding
, making the new net worth
1,000 = \$ 100,000\), which is the target net worth.