Use the following information to determine a firm's cash build: net sales = $150,000; net income = $15,000; beginning-of-period accounts receivable = $60,000; end-of-period accounts receivable = $90,000; and interest = $10,000.
A)$15,000
B)$30,000
C)$60,000
D)$120,000

Question

Quizplus · Accepted Answer

Cash build is calculated as net sales minus the increase in accounts receivable. The increase in accounts receivable is $90,000 - $60,000 = $30,000. Therefore, cash build = $150,000 - $30,000 = $120,000.

Use the Following Information to Determine a Firm's Cash Build