Question

12. Juan is a programmer going to school at

night to earn a higher degree. He starts the
month with $500 in his savings account. His
income is $4750. Each month he currently
spends $750 on food; $400 on clothes; $530
on video games and movies. His classes cost
$500 each month. His essential expenses
(rent, medical costs, insurance, tax) total
$2800. How much does Juan have for his Net
Cash Flow and Ending Cash at the end of the
month?

[A]Net Cash Flow: -$230
Ending Cash: $730
[B] Net Cash Flow: $2,570
Ending Cash: $3,070
[C] Net Cash Flow: -$230
Ending Cash: $270

[D] Net Cash Flow:-$270
Ending Cash: $230

[E] Net Cash Flow: $270
Ending Cash: -$770

Answer 1

Juan's Net Cash Flow at the end of the month is -$230 and his Ending Cash is $270.

To calculate Juan's Net Cash Flow and Ending Cash, you need to subtract his expenses from his income.

Juan's income is $4750 per month. His essential expenses, including rent, medical costs, insurance, and tax, total $2800 per month. He also spends $750 on food, $400 on clothes, and $530 on video games and movies, for a total of $2680 in non-essential expenses.

Therefore, his total expenses are $2800 + $2680 = $5480.

His Net Cash Flow is his income minus his expenses, which is $4750 - $5480 = -$730.

His Ending Cash is his Net Cash Flow plus his starting balance of $500, which is -$730 + $500 = $270.

Therefore, the correct answer is option C: Net Cash Flow: -$230, Ending Cash: $270.