Author Question: CraftCo, Inc.'s projected sales for the first six months of 2012 are given below: Jan. 500,000 ... (Read 62 times)

ssal · **on:** Jul 10, 2018

CraftCo, Inc.'s projected sales for the first six months of 2012 are given below:

Jan. 500,000 April 490,000
Feb. 740,000 May 740,000
Mar. 380,000 June 610,000
40 of sales are collected in cash at time of sale, 50 are collected in the month following the sale,
and the remaining 10 are collected in the second month following the sale. Cost of goods sold is
60 of sales. Purchases are made in the month prior to the sales, and payments for purchases are
made in the month of the sale. Total other cash expenses are 40,000/month. The company's cash
balance as of February 28, 2012 will be 25,000. Excess cash will be used to retire short-term
borrowing (if any). CraftCo, Inc. has no short term borrowing as of February 28, 2012. Assume that
the interest rate on short-term borrowing is 1 per month. The company must have a minimum
cash balance of 15,000 at the beginning of each month. What is CraftCo, Inc.'s projected cash
balance at the end of March 2012?
A) 352,000 B) 301,000 C) 329,000 D) 361,000

Question 2

Gina has planned to start college education in four years from now. To pay for her college education, she has decided to save 1,000 a quarter for the next four years in a bank account paying 12 percent interest (compounded quarterly).

How much will she have at the end of fourth year? (Round to the nearest whole dollar)
A) 1,574
B) 19,116
C) 20,157
D) 16,000