A firm has actual sales of $50,000 in January and $70,000 in February. It expects sales of $90,000 in March and $110,000 in both April and May. Assuming that sales are the only source of cash inflow, and that 60 % of these are for cash and the rest are collected evenly over the following two months, what are the firm’s expected cash receipts for March, April, and May?
Answer to relevant QuestionsBachrach Fertilizer Corp. had sales of $2 million in March and $2.2 million in April. Expected sales for the next three months are $2.4 million, $2.5 million, and $2.7 million. Bachrach has a cash balance of $200,000 on May ...Why would a firm wish to minimize its cash conversion cycle (CCC) even though each of its components is important to the operation of the business? What key actions should the firm pursue to achieve this objective? What role does the ABC system play in inventory control? What group of inventory items does the EOQ model focus on controlling? Describe the objective and cost trade-off addressed by the EOQ model. A firm is weighing five plans that affect several current accounts. Given the five plans and their probable effects on inventory, receivables, and payables (as shown in the following table), which plan would you favor? ...International Oil Company (IOC) uses credit scoring to evaluate gasoline credit card applications. The following table presents the financial and credit characteristics considered and weights (indicating the relative ...
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