COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the ‘formula’ for calculating Net Cash Flow?
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Total receipts + Total Payments
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Opening balance + Net cash flow
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Total payments-Total receipts
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Total receipts-Total payments
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Explanation:
Detailed explanation-1: -To calculate net cash flow, simply subtract the total cash outflow by the total cash inflow.
Detailed explanation-2: -In order to calculate net cash, you must first add up all cash (not credit) receipts for a period. This amount is often referred to as “gross cash.” Once totaled, cash outflows paid out for obligations and liabilities are deducted from gross cash; the difference is net cash.
Detailed explanation-3: -What is net cash flow? Net cash flow is a profitability metric that represents the amount of money produced or lost by a business during a given period. Usually, you can calculate net cash flow by working out the difference between your business’s cash inflows and cash outflows.
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