Fielding Wilderness Outfitterss had projected its sales for the first three six
ID: 2671136 • Letter: F
Question
Fielding Wilderness Outfitterss had projected its sales for the first three six months of 2008 to be as follows:jan. $50,000 apr.$180,000
feb. $60,000 may $240,000
mar. 100,000 june $240,000
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 monthfollowing the sale total other cash expenses are $40,000/month. The company's cash balance as of March 1st, 2008 is projected to be $40,000, and the company wants to maintain a moninimum cash balance of $ 15,000. Excess cash will be used to retitre short-term borrowing(if any exists). Fielding has no short-term as of March 1st 2008. Assume that the interest rate on short term borrowing is 1% per month. What is fielding's projected loss for march?
Explanation / Answer
Fielding Wilderness Outfitterss had projected its sales for the first three six months of 2008 to be as follows:
jan. $50,000 apr.$180,000
feb. $60,000 may $240,000
mar. 100,000 june $240,000
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 monthfollowing the sale total other cash expenses are $40,000/month. The company's cash balance as of March 1st, 2008 is projected to be $40,000, and the company wants to maintain a moninimum cash balance of $ 15,000. Excess cash will be used to retitre short-term borrowing(if any exists). Fielding has no short-term as of March 1st 2008. Assume that the interest rate on short term borrowing is 1% per month. What is fielding's projected loss for march?
ANSWER = $ 84, 000
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