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Read the information supplied and answer the questions which follow: Jim and Susan Doyle and their two children live in Limerick - Leaving Cert Business - Question 5 - 2011
Question 5
Read the information supplied and answer the questions which follow: Jim and Susan Doyle and their two children live in Limerick. Susan, who works as a nurse, has h... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow: Jim and Susan Doyle and their two children live in Limerick - Leaving Cert Business - Question 5 - 2011
Step 1
Outline two benefits of preparing a household budget.
Answer
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A household budget helps individuals plan their spending in line with their income. By analyzing their income and expenses, they can make informed financial decisions to avoid overspending.
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Additionally, it enables households to identify times of high expenditure, allowing them to adjust their spending or save in advance to prevent financial strain.
Step 2
Explain one advantage and one disadvantage of leasing.
Answer
Advantage: Leasing allows the lessee to use an asset without the need for a large upfront payment. This means they can conserve cash flow and have the flexibility to upgrade or change the asset when needed.
Disadvantage: However, leasing can be more expensive in the long run compared to purchasing the asset outright, as there are often ongoing fees and costs associated with the lease.
Step 3
Step 4
Explain two of them.
Answer
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House/Building Insurance provides coverage against loss or damage to the structure of the home due to events like fire, storms, or theft.
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Contents Insurance protects against loss or damage to personal belongings within the home, such as furniture and electronics, covering risks like theft and fire.
Step 5
Outline two advantages for Jim of setting up his own business.
Answer
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Jim can set his own prices and potentially earn a higher income based on the demand for his services, giving him more control over his earnings.
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There is personal satisfaction in succeeding as an entrepreneur, allowing Jim to turn his passion for painting and decorating into a viable career.
Step 6
Outline two difficulties Jim might face in setting up his own business.
Answer
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Jim may face initial costs such as purchasing equipment and marketing his services, which can strain his finances more than expected.
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Finding customers in a competitive market may be challenging, requiring effective marketing strategies and networking to establish a foothold.
Step 7
Explain the terms ‘gross pay’ and ‘net pay’.
Answer
Gross Pay is the total income earned before any deductions, including salary, bonuses, and any other forms of compensation. Net Pay is the amount received after all deductions, such as taxes and contributions, have been made, representing the actual take-home pay.