I have a question and a solution to the question as in the 2 pictures below. Can you explain this solution (without using the Black Scholes formula), especially the inflow and outflow part?

In particular, when is the value of the inflow the value of the bond borrowed at risk free rate, and when is it the value of shorted stock? Does it depend on whether it's a call or put option, or does it depend on whether A (number of stock) or B (bond value) is negative? If so, what if both A and B are positive or negative?

Consider the following two-period binomial option-pricing model, where the stock price evolves according to the timeline below. If the risk-free rate is 6%, what is the price of a European call option that expires in two periods and has an exercise price of $50 ? 2. European CALL t=0t11+2 Payoff: $10 (i) Payaff: $0 (2) Payoff: $0 (S) (a) t=2 : (1)(2){10=60A+1.06B0=40A+1.06B{A=21B=$18.87borrow@RP Inflow: $18.87 Outflow: 2150=$25 cost of call =2518.87=$6.13 @ t=1 (2)(3) pay off / value of eall $0 (strike price 7 mlt (a) t=1 : {6.B=50A+1.06B0=30A+1.06BA=0.3065B=$8.67borrow@Rf Inflow: $8.67 Outflow: 0.306540=$12.26 cost of call t=0=12.268.67=$3.59