Question

Northwest Equipment offers a 3% discount to customers who pay cash at the time of sale and a 2% discount to customers who pay within the first 10 days of the month after sale. Past experience shows that cash collections from customers tend to occur in the following pattern:
Cash collected at time of sale 55%
Collected within cash discount period in first 10 days of month after sale 15
Collected after cash discount period in first month after month of sale 10
Collected after cash discount period in second month after month of sale 15
Never collected 5
Compute the total cash budgeted to be collected in March if sales forecasts are $370,000 for January, $420,000 for February, and $460,000 for March.



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  • CreatedNovember 19, 2014
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