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)