Question

Laura could sell her car for $18,000, and she owes $5,500 on it. Which statement best describes how this situation affects her net worth? (1 point) Responses Laura has an $18,000 asset and a $5,500 liability. Laura has an $18,000 asset and a $5,500 liability. Laura has a $15,500 asset and an $18,000 liability. Laura has a $15,500 asset and an $18,000 liability. Laura's car is considered a liability only because she still owes money on it. Laura's car is considered a liability only because she still owes money on it. Laura's car is considered an asset only because it is worth more than she owes.

Answer 1

The statement that best describes how this situation affects Laura's net worth is: Laura has an $18,000 asset and a $5,500 liability.

This indicates that she has a car valued at $18,000 (the asset) and an amount of $5,500 that she owes on it (the liability). To determine her net worth, you would subtract the liability from the asset, giving her a net worth effect of $18,000 - $5,500 = $12,500. However, the most accurate statement based on the provided options is that she has an asset of $18,000 and a liability of $5,500.