Rachael is in her senior year at college and is taking a summer and one semester to do a six month internship in recreational services. The resort where she is interning is providing room, breakfast, and lunch on the five days a week that she works as well as a small stipend of $250/week after taxes. This is her only source of income over the next six months. Rachael’s living expenses include her cell phone at $65/month, groceries at about $25-35/week, clothing $100/month, haircuts $20/month, and approximately $50/week recreation. Complete a Cash Flow Statement and answer the following questions.

a. What is Rachael’s Total Cash Inflow?

b. What is Rachael’s Total Cash Outflow?

c. What is Rachael’s Net Cash Flow?

d. Rachael would like to have at least $1,000 saved up at the end of her internship to go on an all-inclusive vacation trip to Mexico in January with her friends before returning to her last semester of classes. Prepare a monthly budget that will help her achieve that goal.

e. In the second month of her internship, she dropped her cell phone in the sink and it is not insured. She would love to get a Droid® and the data plan. A new phone will cost her $200 and the monthly plan would be $65/month. How can she adjust her budget to achieve both the short term goal of a new phone and data plan as well as saving enough money up for her Mexican trip?

f. Show how the adjustments will alter her budget from month two onward.