Questions On Cash Flow For August

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1. P1-3: Cash Flows a. Jane’s cash inflow: $450 + $4,500 = $4,950 Jane’s cash outflow: $1,000 + $500 + $800 + $355 + $280 + $1,200 + $222 = $4,357 b. Jane’s net cash flow for August: $4,950 - $4,357 = $593 c. If Jane came to the point where she had a shortage in her net cash flow, she should certainly cut back on some wants and spend only on needs. For example, Jane spent $1,000 on clothes and could cut that in half and save $500. Jane also spent $500 on dining out where she could’ve ate at home for a cheaper price. If possible, she could also consider traveling a little less and save the money she is putting towards gas expenses. d. If Jane had a surplus in the month of August, she should think of the future by comparing her income with other months and see if her surplus is normal or if she is missing something. Jane should look forward to future bills based on possible seasonal events such as once Christmas comes around or birthdays for family members. If she does have future needs for that cash, Jane will want to save that money in a security where the fund will not decline. If she determines that the surplus isn’t needed for any bills in the future, Jane could run take a risk and invest the surplus in a share to possibly maximize her return. 2. P1-5: Identifying agency problems, costs, and resolutions a. The front desk receptionist is taking advantage of a flaw in the business and she is being paid for additional time that she isn’t working. The company has to pay for

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