Based on 2017 sales, Rosario Resources Management has forecasted the following monthly growth in sales and monthly
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Question:
Based on 2017 sales, Rosario Resources Management has forecasted the following monthly growth in sales and monthly cash collection measures for 2018:
a. 12-month cash flow budget in Excel using the following assumption:
- Annual 2017 sales of $4,500,000 per month with forecasted monthly growth of 2%
- 35% of each month's sales for cash; 30% collected the following month; 20% collected 2 months later; 10% collected 3 months later; and 5% never collected
- Initial cash balance of $300,000
Assuming an initial cash balance of $300,000, management has concluded that they will achieve an ending cash balance of $41,000,000.
Required: short summary to evaluate management's decision
Expert Answer:
Based on the provided information it seems that Rosario Resources Management has forecasted signific... View the full answer
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