Grade 10 Intro to Business
Disadvantages of Credit
Encourages you to live beyond limits Future will be tied up in paying debts Increases total cost with interest Leads to impulsive buying
Term Deposits
Financial institution pay a fixed amount of interest for a fixed amount of money for a fixed amount of time.
Net Income
GROSS PROFIT - EXPENSES
Luxury Goods
Goods not necessary for survival
Maturity
Growth is flat (does not increase or decrease) New consumers replace those who leave
Report Fraud
Inform your bank Police and anti-fraud Check credit rating Check your credit cards
First stage
Introduction (which stage?)
Product Life Cycle
Introduction, Growth, Maturity, Decline, Decision Point
Introduction
Launch (regionally, nationally, internationally) of a product
Resources
Natural, Capital, Human
Fundamental Accounting Equation
OE = A - L
Unlimited Liability
People can take everything you own and you are fully responsible. Ex Sole Proprietorship
Maslow's Hierarchy of Needs
Physiological, Safety, Love and Belongingness, Esteem Needs, Self - Actualism
Registered Education Savings Plan
RESP
Gross Profit
REVENUE - COGS
Registered Retirement Savings Plan
RRSP
Decline
Sales are decreasing Seasonal changes or new competition may cause temporary decline
Domestic Transaction
Selling items produced in the same country
International Transaction
Selling items purchases in another country
Term Deposits
There is no risk, no fees and they offer higher interest rates.
Essential Goods
Things that are necessary
Liabilities
Things you owe
Assets
Things you own
Advantages of Credit
Use something and enjoy now Buy things you could not buy with your current income Can handle emergencies and unexpected costs Pay more to buy goods of higher quality Take advantage of sales Provides you with a record of your statements
Installment Sales Credit
a credit plan that requires a purchaser to make a down payment and fixed regular payments with finance charges added to the purchase price.
Chequing/Savings Account
a depositor receives monthly statements instead of a passbook. Funds are easily accessible.
Tarrifs
a form of tax on certain imports
Registered Retirement Savings Plan
a plan that helps individuals set aside money to be used after they retire.
Global Product
a standardized product offered in the same format in all countries (NO packaging) ex. Soccer ball, pencil → food not considered global product because of labels in different languages
Registered Education Savings Plan
a tax-sheltered investment designed to help parents finance their child's post-secondary education. When the student withdraws the money, no tax is payed.
Revolving Credit
allows consumers to charge purchases at anytime, but a monthly payment is requires
CREDIT RATING
an indication of the level of risk that consumers, businesses and governments will pose if the credit is granted to them
Franchise
be your own boss, get additional training, profit from name recognition, nothing is ever free, must play by the rules,
Consumer Loans
can be used to finance purchases of almost anything except a home (type of loan)
Bonds
certifies that you loaned money to the government or a corporation and outlines the terms of repayment
Consolidation Loan
combines all debt into one consumer loan.
Users of Credit
consumers, businesses, government
Charge Accounts
contract between store and consumer, and can buy things on credit
last stage
decision point (which stage)
fourth stage
decline (which stage)
Savings Account
depositor receives a passbook in which deposits, withdrawals and interest are recorded. Funds are easily accessible, and interest rates are low
Mutual Funds
different stocks put together
Corporation
easy to sell, limited liability, tax advantage, a lot of regulations.
Sole Proprietorship
easy to set up, less govn't rules, complete control, hard to fund, personal assets at risk
Guaranteed Investment Certificates (GICs)
financial institution pays a fixed amount of interest for a fixed amount of money for a fixed amount of time. There is a penalty is the money is cashed before maturity
Term Loans
form of installment credit where the borrower agrees to make fixed monthly payments for a set period of time (type of loan)
Second stage
growth (which stage)
Elasticity of Supply
if a seller can quickly adjust the quantity supplied when the price changes, the good or service has an elastic supply.
PROXIMITY
in Canada, most of the population is very close to the American border, so their business affects us. Ex. In Windsor they produce cars, and ship them to Detroit, if something happens in Detroit it immediately affects Windsor.
Third Stage
maturity (which stage?)
Limited Liability
people can sue you only to an extent (ex. Corporation)
Co-Operatives
people volunteer, owned and controlled by members, possible conflict, longer decision making process
Capital Gains
profits from the sale of a capital asset
Supply
quantity of goods and services that sellers are willing to offer
Demand
relationship between price of product and the quantity the buyer needs or wants.
Stocks
represent ownership of the corporation. Stockholders are entitles to a share of the profits as well as a vote in how the company is run.
30 - Day Charge Account
requires full payment within 30 days
Layaway Plans
sets product aside while the costomer makes equal payments each month (type of plan)
Debtor
someone who borrows / owes money
Creditor
someone who lends money
NEED
something that is required to survive
PRICE
the cost of producing a product is different in each country. If costs of wages taxes and materials are cheaper in another country, it may be less expensive to produce goods over seas and ship them to Canada.
GIC benefits
there is no risk and no fees.
WANT
things that is unnecessary to live
Rule of 72
to determine how many years it will take to double your money
Credit
using someone else's money for a period of time
Elasticity of Demand
where a small change in price of goods or services results in a large change in the quantity demanded by consumers
equilibrium
where demand and supply intersect
deficit
where demand is greater than supply
surplus
where supply is greater than demand
Simple Interest formula
Dollar Amount x interest rate x years
Compound Interest
(Principle + Interest Earned) x Interest Rate x time
Rule of 72 Equation
72/interest rate
Partnership
: easy to set up, more areas of strength, liabilities and disagreements,
Decision Point
Brand-management decisions are made to reformulate, repackage, and reintroduce a new and improved product If decline continues, the manufacturer discontinues the product and removes it from the market
Types of Bonds
Canada Savings Bonds, Government Bonds, Corporate Bonds
The Three C's of Credit
Character, Capacity, Capital
Growth
Competitors will enter the market if product is successful (adding features, improving quality, cheaper)