Which of the following modifications to the list of assets and liabilities below would result in a negative net worth? House val
ued at $90,000. Mortgage owed $78,000. Car valued at $11,000. Car loan of $5,000. Student loan of $13,700. Stocks valued at $2,500. Savings of $3,000. a. Net worth is already negative. b. House value decreasing to $83,000. c. Borrowing $10,000 more in student loans. d. Selling off all owned stocks.
Assets listed include: the house (90,000), car (11,000), stocks (2500), and savings (3000).
Liabilities listed include: Mortgage (78,000), car loan (5000), and student loan (13,700).
You add the assets and subtract the liabilities, so: 90,000 + 11,000 + 2500 + 3000 - 78,000 - 5000 - 13,700 = 9800.
So A is not the answer because the net worth is a positive $9800. B is not the answer because that would decrease our net worth by $7000, which would still be a positive $2800. D is not the answer because that would not change our net worth--it is a $2500 asset whether we have it in stock or cash. So C is the correct answer--if we add $10,000 in student loans, our net worth would go from a positive $9800 to a -$200.
