Question

based on the spreadsheet below, which of the following is a true statement?
a\tb
1 cash inflows
2 disposable income\t$1,600
3 interest on deposits\t$0
4 income from investments\t$0
5 total cash inflow
6
7 cash outflows
8 rent\t$575
9 utilities\t$120
10 cable and telephone\t$80
11 groceries\t$320
12 car expenses\t$150
13 recreation\t$80
14 insurance\t$115
15 miscellaneous\t$50
16 total cash outflow
a. the net cash flow is negative.

Explanation:

Step1: Calculate total cash inflow

The only non - zero cash inflow is disposable income of $1600$. So total cash inflow \(=1600\).

Step2: Calculate total cash outflow

Sum up all the individual cash outflows: \(575+120 + 80+320+150+80+115+50=1490\).

Step3: Calculate net cash flow

Net cash flow \(=1600 - 1490 = 110\). Since \(110>0\), the statement "The net cash flow is negative" is false.

Answer:

First, calculate the total cash - inflow and total cash - outflow to determine the net cash - flow.

1. Calculate total cash inflow:

• Disposable income is $1600$, interest on deposits is $0$, and income from investments is $0$.
• Total cash inflow \(=1600 + 0+0=1600\).

1. Calculate total cash outflow:

• Rent is $575$, utilities is $120$, cable and telephone is $80$, groceries is $320$, car expenses is $150$, recreation is $80$, insurance is $115$, and miscellaneous is $50$.
• Total cash outflow \(=575 + 120+80 + 320+150+80+115+50\)
• \(575+120 = 695\), \(695+80 = 775\), \(775+320 = 1095\), \(1095+150 = 1245\), \(1245+80 = 1325\), \(1325+115 = 1440\), \(1440+50 = 1490\).

1. Calculate net cash - flow:

• Net cash - flow \(=\text{Total cash inflow}-\text{Total cash outflow}\).
• Net cash - flow \(=1600 - 1490=110\).

Since the net cash - flow is $110$ (a positive number), statement a is false.

If there were other statements to consider, we would need to analyze them as well. But based on the information given so far, the answer depends on the full set of statements. If the only statement is "The net cash flow is negative", then the answer is that this statement is false.