Which funding method involves using existing cash resources to pay for projects?

The selected answer is correct because "Pay as you go" is a funding method that emphasizes utilizing existing cash resources for financing projects. This approach allows governments or organizations to allocate funds that are already available, thereby avoiding incurring debt or future obligations that would arise from other financing methods, such as issuing bonds. By paying for projects with cash on hand, the entity can maintain flexibility in its budget without the burden of interest payments or loan repayments.

This method is often favored for funding capital projects, particularly when funding is limited or when the entity wishes to maintain financial stability and control over its cash flow. It encourages responsible fiscal management, as it compels the organization to prioritize projects based on available resources rather than projected future income.

Other methods listed involve borrowing or creating obligations, which does not apply to the straightforward and immediate nature of "Pay as you go." The focus on using available cash resources distinguishes this funding method from those that rely on debt issuance or taxation, thus aligning it with prudent financial practices.