Next month, a garage that specialises in servicing commercial vehicles, is considering offering 50% of its...

Transcribed Image Text:

Next month, a garage that specialises in servicing commercial vehicles, is considering offering 50% of its customers a two month credit period for payment, as opposed to asking all its customers to pay up front. The owner of the garage has also managed to increase the time it needs to make its payments by negotiating with some of its suppliers. As of next month, 60% of the garages outflows will be payable immediately with the rest payable in one month's time. Outflows are estimated to be 2/5 of revenue each month. The owner of the garage estimates that revenue next month will be £40,000. Calculate the total cash inflows, total cash outflows and net cash flow for next month. Next month, a garage that specialises in servicing commercial vehicles, is considering offering 50% of its customers a two month credit period for payment, as opposed to asking all its customers to pay up front. The owner of the garage has also managed to increase the time it needs to make its payments by negotiating with some of its suppliers. As of next month, 60% of the garages outflows will be payable immediately with the rest payable in one month's time. Outflows are estimated to be 2/5 of revenue each month. The owner of the garage estimates that revenue next month will be £40,000. Calculate the total cash inflows, total cash outflows and net cash flow for next month.

Answer rating: 100% (QA)

To calculate the total cash inflows total cash outflows and net cash flow for next month we need to ... View the full answer