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lara31 [8.8K]
4 years ago
15

. Tierney Enterprises is constructing its cash budget. Its budgeted monthly sales are $5,000, and they are constant from month t

o month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget for a typical month and calculate the average net cash flow during the month. a. $1,092 b. $1,150 c. $1,210 d. $1,271 e. $1,334
Business
1 answer:
mel-nik [20]4 years ago
3 0

Answer:

b.$1,150

Explanation:

Sales Collection   $5,000*.98                      $4,900

Payment of purchases  $5,000*50%            ($2,500)

Other payments            $5,000*25%             ($1,250)

Net Cash flow during a typical month             $1,150      

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