Starting balance $20,000; ending balance $14,000; what is burn rate?

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Multiple Choice

Starting balance $20,000; ending balance $14,000; what is burn rate?

Explanation:
Burn rate is the amount of cash a business spends over a specific period. It’s calculated by subtracting the ending cash balance from the starting balance for that period. Here, you began with $20,000 and ended with $14,000, so the company spent $20,000 − $14,000 = $6,000 during that period. Therefore, the burn rate is $6,000. If you’re thinking in monthly terms, that would be $6,000 per month, assuming the period shown is a month.

Burn rate is the amount of cash a business spends over a specific period. It’s calculated by subtracting the ending cash balance from the starting balance for that period. Here, you began with $20,000 and ended with $14,000, so the company spent $20,000 − $14,000 = $6,000 during that period. Therefore, the burn rate is $6,000. If you’re thinking in monthly terms, that would be $6,000 per month, assuming the period shown is a month.

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