Antonio and Mika have a monthly income of $10,000. They have monthly expenditures that total $5,000. What is TRUE about their cash flow?

Question

They have a $5,000 surplus.

They have a $5,000 deficit.

They have a negative cash flow.

They need to borrow money to meet their monthly financial requirements.

Answer 1

To determine the cash flow of Antonio and Mika, we can subtract their monthly expenditures from their monthly income.

Monthly Income: $10,000
Monthly Expenditures: $5,000

Cash Flow = Income - Expenditures
Cash Flow = $10,000 - $5,000
Cash Flow = $5,000

Since their cash flow is positive ($5,000), the following statement is TRUE:

They have a $5,000 surplus.

The other statements are not true in this context:

• They do not have a deficit.
• They do not have negative cash flow.
• They do not need to borrow money to meet their monthly financial requirements.