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Current Asset Management Solutions 10

# Current Asset Management Solutions 10 - B C D E 90 days 65...

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Old Exam Questions - Current Asset Management - Solutions Page 10 of 21 Pages B. 90 days C. 65 days D. 48 days E. 66 days CCC = ICP + RCP - PDP = 72 + 60 - 45 = 87 days 12. Assume that your company’s budgeted monthly sales are constant at \$3,000. Forty percent of its customers pay in the first month and take the 2 percent discount. The remaining 60 percent pay in the month following the sale and don’t receive a discount. Your company’s bad debts are very small and are excluded from this analysis. Purchases for next month’s sales are constant each month at \$1,500. Other payments for wages, rent, and taxes are constant at \$700 per month. Construct a single month’s cash budget with the information given and determine the average cash gain or (loss) during a typical month for your company. * A. \$776 B. \$853 C. \$740 D. \$812 E. \$708 Construct a simplified cash budget: Sales \$3,000 Collections (same month’s sales) 1,176 (0.98 * 0.40 * \$3,000) Collections (last month’s sales) 1,800 (1.00 * 0.60 * \$3,000)
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