Kyle plans, monitors, and assesses his financial position using cash flows each

Question

Kyle plans, monitors, and assesses his financial position using cash flows each month. He has a savings account offering 0.5 % interest, and his bank loans money at 5% per year. His cash flows in May were as follows:

Item                      Cash Inflow        Cash Outflow
Fishing Supply                            -$2000
Interest Received 1000
Dining out                                      -1300
Groceries                                     -100
Pay                          4100
Car Payment                                -350
Utilities                                          -150
Rent                                            -1500
Gas                                               -100

a. What are Kyle’s total cash inflows and outflows?
b. What is his net cash flow for May?
c. If there were a shortage, list several options for him to eliminate the shortage.
d. If there were a surplus, suggest two essentially different strategies for him to follow?

Explanation / Answer

a. What are Kyle’s total cash inflows and outflows?

Kyle’s total cash inflows = 1000+4100

Kyle’s total cash inflows = $ 5100

Kyle’s total cash outflows = 2000 + 1300 + 100 + 350 + 150 + 1500+100

Kyle’s total cash outflows = $ 5500

b. What is his net cash flow for May?

Net cash flow for May = Kyle’s total cash inflows - Kyle’s total cash outflows

Net cash flow for May = 5100 - 5500

Net cash flow for May = $ -400

c. If there were a shortage, list several options for him to eliminate the shortage.

d. If there were a surplus, suggest two essentially different strategies for him to follow?

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