The beginning cash balance is $18,000. Sales are forecasted at $860,000 of which 80% will be on account. Seventy percent of credit sales are expected to be collected in the year of sale. Cash expenditures for the year are forecasted at $475,000. Accounts Receivable from previous accounting periods totaling $11,300 will be collected in the current year. The company is required to make a $14,000 loan payment and an annual interest payment on the last day of every year. The loan balance as of the beginning of the year is $95,000, and the annual interest rate is 8%.

The beginning cash balance is $18,000. Sales are forecasted at $860,000 of which 80% will be on account. Seventy percent of credit sales are expected to be collected in the year of sale. Cash expenditures for the year are forecasted at $475,000. Accounts Receivable from previous accounting periods totaling $11,300 will be collected in the current year. The company is required to make a $14,000 loan payment and an annual interest payment on the last day of every year. The loan balance as of the beginning of the year is $95,000, and the annual interest rate is 8%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

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