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CraftCo, Inc.' 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.' earnings before interest and taxes for April 2012?

Select one:

a. $133,000

b. $156,000

c. $142,000

d. $ 93,000

2.

A company collects 25% of its sales during the month of sale, 65% one month after the sale, and 10% two months after the sale. The company expects sales of $50,000 in August, $80,000 in September, $90,000 in October, and $60,000 in November. How much money is expected to be collected in October?

Select one:

a. $79,500

b. $55,000

c. $90,000

d. $22,500

3.

LPD Logistics, Inc.'s projected sales for the first six months of 2010 are given below.

Jan. $300,000 April $350,000

Feb. $350,000 May $500,000

Mar. $475,000 June $400,000

20% of sales are collected in the month of the sale, 75% are collected in the month following the sale, and 5% are written off as uncollectible. Cost of goods sold is 80% of sales. Purchases are made the month prior to the sales and are paid during the month the purchases are made (i.e. goods sold in March are bought and paid for in February). Total other cash expenses are $35,000/month. The company's cash balance as of February 1, 2010 will be $30,000. Excess cash will be used to retire short-term borrowing (if any). LPD has no short term borrowing as of February 28, 2010. Assume that the interest rate on short-term borrowing is 1% per month. The company must have a minimum cash balance of $20,000 at the beginning of each month. What is LPD's projected cumulative borrowing as of March 1, 2010?

Select one:

a. $110,000

b. $90,000

c. $70,000

d. -0-

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