Question

Carlos and Keisha have a monthly income of $25,000. They have monthly expenditures that total $30,000. What is TRUE about their cash flow?


They have a $5,000 surplus.


They have a $5,000 deficit.


They have a positive cash flow.


They have extra money that they could use for investments.

Answer 1

Carlos and Keisha have a monthly income of $25,000 and monthly expenditures that total $30,000. To analyze their cash flow:

- **Income:** $25,000
- **Expenditures:** $30,000

To find their cash flow, we can subtract their expenditures from their income:

Cash Flow = Income - Expenditures = $25,000 - $30,000 = -$5,000

This indicates that they are spending $5,000 more than they earn each month.

Based on this analysis, the TRUE statement about their cash flow is:

**They have a $5,000 deficit.**