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Cash Flow

Cash flows: It is typical for Jane to plan, monitor and assess her financial position using cash flow over a given period, typically a month. Jane has a savings account and her bank loans money a 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 $1,300
Interest received $440
Dining out 470
Groceries 790
Salary 4400
Auto payment 344
Utilities 280
Mortgage 1,170
Gas 212
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

The solution provides step by step method for the calculation of total cash inflow, total cash outflow and net cash flow. Formula for the calculation and Interpretations of the results are also included.