Multiple Choice
LPD Logistics,Inc.'s projected sales for the first six months of 2010 are given below.
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 gross profit for April?
A) ($50,000)
B) $70,000
C) $100,000
D) $110,550
Correct Answer:
Verified
Correct Answer:
Verified
Q89: CraftCo,Inc.'s projected sales for the first six
Q90: Traditional financial forecasting takes the sales forecast
Q91: Issuing new short-term bonds to finance an
Q92: The first step in a corporation's financial
Q93: A firm's cash position would most likely
Q95: Matterhorn,Inc.had the following sales for the past
Q96: One of the virtues of the percent-of-sales
Q97: The percent of sales forecasting method works
Q99: Spontaneous sources of financing include<br>A) accounts payable
Q99: Other things equal,if a firm increases its