Question

Explain how cash inflow and outflow affects the components of your financial plan​

Answer 1

The following are the ways in which cash inflow and outflow affect the components of a financial plan​:

• The inflow and outflow would reflect in the data related to tax (income tax, sales tax, etc.) in some or the other manner.
• More the inflow and outflow more would be the entries in the balance sheet.
• The inflow would dispense more possible opportunities for investment whereas the outflow would decrease them substantially.
• The inflow and outflow of cash would both affect insurance planning with every single cash transaction.