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Determine Jane's total cash inflows and cash outflows

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Cash flows It is typical for Jane to plan, monitor, and assess her financial position
using cash flows over a given period, typically a month. Jane has a savings account,
and her bank loans money at 6% per year while it offers short-term investment rates
of 5%. Jane's cash flows during August were as follows:

Item Cash inflow Cash outflow
Clothes $1,000
Interest received $ 450
Dining out 500
Groceries 800
Salary 4,500
Auto payment 355
Utilities 280
Mortgage 1,200
Gas 222

a. Determine Jane's total cash inflows and cash outflows.
b. Determine the net cash flow for the month of August.
c. If there is a shortage, what are a few options open to Jane?
d. If there is a surplus, what would be a prudent strategy for her to follow?

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Solution Summary

Your tutorial is a cash flow schedule and a few sentences of advice for Jane.

Solution Preview

See cash flow analysis in Excel, attached.

It would be prudent for Jane to pay down debt because she can't earn more ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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