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Which one of the following is a definition of insolvency? Select one answer - Edexcel - GCSE Business - Question 6 - 2022 - Paper 1
Question 6
Which one of the following is a definition of insolvency? Select one answer. A A product becoming obsolete B Business failure due to unpaid debts C Generating h... show full transcript
Worked Solution & Example Answer:Which one of the following is a definition of insolvency? Select one answer - Edexcel - GCSE Business - Question 6 - 2022 - Paper 1
Step 1
Step 2
Using the information in Figure 1, calculate the total net cash-flow from May to August.
Answer
To find the total net cash-flow, we need to calculate the cash inflows and cash outflows for each month and then determine the net cash-flow:
May:
- Cash Inflows: 5,000
- Cash Outflows: 3,000
- Net Cash Flow = Inflows - Outflows = 5,000 - 3,000 = 2,000
June:
- Cash Inflows: 6,000
- Cash Outflows: 4,000
- Net Cash Flow = 6,000 - 4,000 = 2,000
July:
- Cash Inflows: 7,000
- Cash Outflows: 5,000
- Net Cash Flow = 7,000 - 5,000 = 2,000
August:
- Cash Inflows: 6,000
- Cash Outflows: 4,000
- Net Cash Flow = 6,000 - 4,000 = 2,000
Now, add up the net cash-flows from each month:
Total Net Cash Flow = 2,000 + 2,000 + 2,000 + 2,000 = 8,000.