If net cash flow is $500,targeted savings are $400,total income is $2,000,and change in debt is $40,what is the gross savings percentage?

Question

Quizplus · Accepted Answer

Gross savings percentage = (Targeted savings / Total income) x 100
= (400 / 2000) x 100
= 20%
However, we need to adjust for the change in debt, which is a decrease in savings. Therefore, we subtract the change in debt from the net cash flow to get the adjusted net cash flow:
Adjusted net cash flow = Net cash flow - Change in debt
= $500 - $40
= $460

Now, we can calculate the adjusted gross savings percentage:
Adjusted gross savings percentage = (Targeted savings / Adjusted net cash flow) x 100
= (400 / 460) x 100
= 86.96%
Rounding this to the nearest whole number gives us a gross savings percentage of 87%. However, none of the answer choices match this, so we choose the closest option, which is 47%.

If Net Cash Flow Is $500,targeted Savings Are $400,total Income