Question

The expenses and income of an individual are given in table form to the right. Find the net monthly cash flow​ (it could be positive or​ negative). Assume salaries and wages are after taxes. When you need to convert between weeks and​ months, assume that

1 month equals 4 weeks
Income:
part time job:700 a month
college fund from grandparents : 500 a month
Scholarship: 3600 a year
Expenses:
Rent= 400 a month
food= $60 a week
tuition and fees=3600 twice a year
Incidentals=$90 a week
What is the net monthly cash flow?

Answer 1

To find the net monthly cash flow, we total the monthly income ($1500) and subtract the total monthly expenses ($1600), resulting in a negative cash flow of $100 per month.

Step-by-step explanation:

To calculate the net monthly cash flow, revenues must be subtracted by expenses. Starting with monthly income, we have:

• Part-time job: $700
• College fund: $500
• Scholarship: $3600 per year - this is $300 per month ($3600 ÷ 12 months).

Total monthly income is $700 + $500 + $300 = $1500.

Next, we calculate monthly expenses:

• Rent: $400
• Food: $60 per week, which is $60 x 4 = $240 per month.
• Tuition and fees: $3600 twice a year. Monthly, this is $3600 ÷ 6 = $600.
• Incidentals: $90 per week, which is $90 x 4 = $360 per month.

Total monthly expenses are $400 + $240 + $600 + $360 = $1600.

Finally, net monthly cash flow is income minus expenses: $1500 - $1600 = -$100.

This means the student has a negative cash flow of $100 per month.