Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. intro it is the beginning of january. actual sales

Intro It is the beginning of January. Actual sales for the previous quarter (Q4) and...

50.1K

Verified Solution

Question

Accounting

Intro

It is the beginning of January. Actual sales for the previous quarter (Q4) and estimated sales for the next five quarters are as follows (in $ million):

Quarter Q4 Q1 Q2 Q3 Q4 Q1
Sales 27 28.35 29.77 31.26 32.82 34.46

You collect 50% of sales in the current quarter and the remainder in the following quarter. You expect to spend 40% of the following quarter's sales on purchases of components from suppliers, and to pay 70% of those purchases in the current quarter and the remainder in the following quarter. Wages and other expenses add up to 30% of each quarter's sales.

You have to pay $4 million in interest and dividends each quarter, and plan to spend $7 million on new machinery in Q3.

Assume that each quarter has 90 days, sales occur evenly throughout the quarter and all other cash flows occur at the end of the quarter.

Attempt 1/10 for 8.5 pts.

Part 1

What is your expected net cash flow in Q1 (in $ million)?

Submit

Attempt 1/10 for 8.5 pts.

Part 2

What is your expected net cash flow in Q2 (in $ million)?

Submit

Attempt 1/10 for 8.5 pts.

Part 3

What is your expected net cash flow in Q3 (in $ million)?

Submit

Attempt 1/10 for 8.5 pts.

Part 4

What is your expected net cash flow in Q4 (in $ million)?

Submit

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students