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borteleto borteleto
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5 years ago
Fielding Wilderness Outfitters had projected its sales for the first six months of 2010 to be as follows:

Jan.$250,000April$300,000
Feb.$340,000May$350,000
Mar.$280,000June$380,000

Cost of goods sold is 60% of sales. Purchases are made and paid for two months prior to the sale. 40% of sales are collected in the month of the sale, 40% are collected in the month following the sale, and the remaining 20% in the second month following the sale. Total other cash expenses are $40,000/month. The company's cash balance as of March 1st, 2010 is projected to be $40,000, and the company wants to maintain a minimum cash balance of $15,000. Excess cash will be used to retire short-term borrowing (if any exists). Fielding has no short-term borrowing as of March 1st, 2010. Assume that the interest rate on short-term borrowing is 1% per month. What is Fielding's projected total receipts (collections) for April?
A) $124,000
B) $180,000
C) -$4,000
D) $36,000
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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DeanaRayDeanaRay
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borteleto Author
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5 years ago
Thank you for helping me with my quiz
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