Eli Lilly is very excited because his nursery and plant company's sales are expected to double from $580,000 to $1,160,000 next year. Eli points out that net assets (Assets - Liabilities) will remain at 60 percent of sales. His company will enjoy a 10 percent return on total sales. He will start the year with $180,000 in the bank and is bragging about the Jaguar and the luxurious house he will buy.

 Calculate your probable cash balance or deficit by the end of the year. Start with initial cash and subtract asset accumulation (equal to 60 percent of increased sales) and add profit. 

Answer rating: 100% (QA)

To calculate the probable cash balance or deficit at the end of the year we need to follow these s... View the full answer