Concept explainers
Considering Your Costs and Benefits
Preparing a personal budget is a great first step toward control over your
Before purchasing a house, you should first consider whether buying it is the best choice for you.
Suppose you just graduated from college and are moving to a new community. Should you immediately buy a new home?
YES: If I purchase a home. I am making my housing cost more like a “fixed cost.” thus minimizing increases in my future housing costs. Also. 1 benefit from the appreciation in my home's value. Although recent turbulence in the economy has caused home prices in many communities to decline. I know that over the long term, home prices have increased across the country.
NO: I just moved to a new town, so 1 don't know the housing market. I am new to my job. so 1 don't know whether I will like it or my new community. Also, if my job does go well, it is likely that my income will increase in the next few years, so I will able to afford a better house if 1 wait.
Therefore, the flexibility provided by renting is very valuable to me at this point in my life.
Instructions
Write a response indicating your position regarding this situation. Provide support for your view.
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
Managerial Accounting, Binder Ready Version: Tools for Business Decision Making
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education