Question: 1.) You estimate a model to explain net cash flow using sales as the independent variable. The model is: Net Cash Flow = 13,000 +

1.)

You estimate a model to explain net cash flow using sales as the independent variable. The model is:

Net Cash Flow = 13,000 + (0.8) Sales

If the next month's sales will equal $192642 what is the forecasted Net Cash Flow?

2.)The firm can convert to ACH for disbursement, at a cost of $ 5384. The firm is expected to average a perpetual 5,000 payments per year. ACH disbursing will save the firm 20 cents per payment. The discount rate is 15%. What is the minimum number of annual payments required to justify the cost to convert to ACH disbursing?

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