Net cash flow questions - Cash Managment

topcat

Morning all,

bit stuck on this questions I think the net cash flow has been decreased but AAT answers say increased but can not understand why?

My workings are

Old cash flow: 51900+50520+53170+53840=209430
New cash flow: 51116+50164+52947+53573 =207800

209430-207800=1630

Therefore the new cash flow has decreased payments for these periods by 1630, why would it be increase ? :confused1:

Any help would be great please

Nps

Total payments out have decreased, therefore the net effect is more cash coming in, therefore net cash flow has increased.

You've just looked at the outflow rather than the overall effect on the in/out relationship. In your workings you describe it as 'old and new cash flow', but is actually its just old and new cash outflow.

topcat

Nps1976 wrote: »

Total payments out have decreased, therefore the net effect is more cash coming in, therefore net cash flow has increased.

You've just looked at the outflow rather than the overall effect on the in/out relationship. In your workings you describe it as 'old and new cash flow', but is actually its just old and new cash outflow.

Brilliant thank you now I understand ! your more helpful than my tutors :thumbup1:

Old cash flow: 51900+50520+53170+53840=209430
Receipts 351000
351000-209430 = 141570

New cash flow: 51116+50164+52947+53573 =207800
Receipts 351000
351000-207800 = 143200
therefore increased cash flow

Nps

Glad to be of assistance. It's partly F8 ACCA revision avoidance on my part!