Question

Exeter enterprise inc reported net sales of $300 million last year and generated a net income of $ 65 million. last years accounts receivable increase by $8 million. what is the maximum amount of cash that exeter enterprise inc received from sales last year

Answer 1

Answer:

The correct answer would be $73 Millions.

Explanation:

The amount of cash a company possesses is the net income which it generates over a period of time. Account receivables are also considered to be the cash amount for the company which it collects within that period. So as given in this question, we would not take $300 million Sales, as company will exclude app expenses from this amount and then the remaining amount will be considered as the Cash in hand. So $65 Million will be the net income and as the account receivables also increased to $8 Millions, we will include this amount in the net income as:

Total Cash = Net Income + Account Receivables

Total Cash = $65M + $8M

Total Cash = $73 Millions.