To determine the month in which the Anderson family had the greatest net cash flow, we need to perform the following steps:
1. Identify and sum the total cash inflows for each month.
2. Identify and sum the total cash outflows for each month.
3. Subtract the total cash outflows from the cash inflows to get the net cash flow for each month.
4. Compare the net cash flows to determine the month with the greatest net cash flow.
Given data:
- Cash Inflows:
- January: \[tex]$2,760
- April: \$[/tex]3,060
- August: \[tex]$2,760
- December: \$[/tex]2,900
- Cash Outflows:
- January:
- Total: \[tex]$1,020 (base) + \$[/tex]230 (mortgage) + \[tex]$85 (electric) + \$[/tex]115 (water) + \[tex]$150 (cable and telephone)
- Sum: \$[/tex]1,600
- April:
- Total: \[tex]$1,020 (base) + \$[/tex]185 (mortgage) + \[tex]$80 (electric) + \$[/tex]115 (water) + \[tex]$540 (cable and telephone)
- Sum: \$[/tex]1,940
- August:
- Total: \[tex]$1,020 (base) + \$[/tex]115 (mortgage) + \[tex]$100 (electric) + \$[/tex]115 (water) + \[tex]$585 (cable and telephone)
- Sum: \$[/tex]1,935
- December:
- Total: \[tex]$1,020 (base) + \$[/tex]205 (mortgage) + \[tex]$90 (electric) + \$[/tex]115 (water) + \[tex]$710 (cable and telephone)
- Sum: \$[/tex]2,140
Let's calculate the net cash flow for each month:
1. Net Cash Flow Calculation:
- January:
[tex]\[
\text{Net Cash Flow} = \text{Inflows} - \text{Outflows}
= 2,760 - 1,600 = \$1,160
\][/tex]
- April:
[tex]\[
\text{Net Cash Flow} = 3,060 - 1,940 = \$1,120
\][/tex]
- August:
[tex]\[
\text{Net Cash Flow} = 2,760 - 1,935 = \$825
\][/tex]
- December:
[tex]\[
\text{Net Cash Flow} = 2,900 - 2,140 = \$760
\][/tex]
2. Comparison of Net Cash Flows:
- January: \[tex]$1,160
- April: \$[/tex]1,120
- August: \[tex]$825
- December: \$[/tex]760
Upon comparing these net cash flows, the month with the greatest net cash flow is January with \$1,160.
Therefore, the Anderson family had the greatest net cash flow in January.
