Question 1

If projected net cash outflow for November is ($10,000), the beginning cash balance is $4,000, the minimum cash balance is $3,000, and the beginning loan balance is $8,000, what will be the cumulative loan balance at the end of November?
A) $14,000
B) $5,000
C) $17,000
D) $22,000

Accepted Answer

The answer of If projected net cash outflow for November...

Question 2

Firms that successfully increase their inventory turnover ratio will, among other things,
A) be able to reduce their borrowing needs.
B) be able to reduce their dividend payments to stockholders.
C) find it more difficult to be given credit by their resource suppliers.
D) have a greater need for high balances in their cash accounts.

Accepted Answer

By increasing inventory turnover ratio, firms can sell their inventory more quickly and generate cash, which can be used to reduce their borrowing needs.

Question 3

If projected net cash outflow for January is ($6,500), the beginning cash balance is $16,000, the minimum cash balance is $5,000, and the beginning loan balance is $4,500, what will be the cash balance on the pro forma cash budget at the end of January?
A) $5,000
B) $10,000
C) $12,000
D) $4,500

Accepted Answer

The answer of If projected net cash outflow for January...

Question 4

If projected net cash outflow for January is ($6,500), the beginning cash balance is $16,000, the minimum cash balance is $5,000, and the beginning loan balance is $4,500, what will be cumulative amount of loan at the end of January?
A) $4,500
B) $10,000
C) $12,000
D) $0

Accepted Answer

The answer of If projected net cash outflow for January...

Question 5

If projected net cash outflow for November is ($10,000) and the beginning cash balance is $4,000, which is the minimum cash balance required by the bank, what amount of loan would be needed for November?
A) $14,000
B) $5,000
C) $10,000
D) $22,000

Accepted Answer

4000 − 10,000 = −6,000, so 10,000 is needed to be borrowed to satisfy an ending balance of 4,000.

Question 6

If the actual A/R at the end of February was $12,000 and projected sales in March are $50,000, where 70% of sales are on credit, 60% of credit sales are collected in the month of the sale, and 40% are collected in the month after the sale, what is the projected A/R balance on the pro forma balance sheet for the end of March?
A) $14,000
B) $48,000
C) $20,000
D) $35,000

Accepted Answer

A/R Bal. end of March = A/R from March sales
= (40% of March credit sales)
= ($35,000 × 0.4) = $14,000, all of February's AR balance should be collected in March.

Question 7

If the actual A/R at the end of February was $12,000 and projected sales in March are $50,000, where 70% of sales are on credit, 60% of credit sales are collected in the month of the sale, and 40% are collected in the month after the sale, what amount of cash is collected during March?
A) $36,000
B) $14,000
C) $48,000
D) $35,000

Accepted Answer

- First, we need to calculate the total credit sales in March: $50,000 x 70% = $35,000
- Then we need to calculate how much of these credit sales will be collected in March: $35,000 x 60% = $21,000
- Finally, we add the amount that will be collected in the month after the sale: $35,000 x 40% = $14,000
- The total cash collected during March will be: $21,000 + $14,000 = $35,000

Question 8

If Excel Inc. has projected sales of $30,000 in January, $20,000 in February, and $20,000 in March, where 80% of sales are on credit, 20% are collected in the month of sale, and 80% are collected the month after, what are the cash receipts in March?
A) $20,000
B) $16,000
C) $21,400
D) $10,300

Accepted Answer

The answer of If Excel Inc. has projected sales of...

Quiz 4: Financial Forecasting

If projected net cash outflow for November is ($10,000) , the beginning cash balance is $4,000, the minimum cash balance is $3,000, and the beginning loan balance is $8,000, what will be the cumulative loan balance at the end of November?

Firms that successfully increase their inventory turnover ratio will, among other things,

If projected net cash outflow for January is ($6,500) , the beginning cash balance is $16,000, the minimum cash balance is $5,000, and the beginning loan balance is $4,500, what will be the cash balance on the pro forma cash budget at the end of January?

If projected net cash outflow for January is ($6,500) , the beginning cash balance is $16,000, the minimum cash balance is $5,000, and the beginning loan balance is $4,500, what will be cumulative amount of loan at the end of January?

If projected net cash outflow for November is ($10,000) and the beginning cash balance is $4,000, which is the minimum cash balance required by the bank, what amount of loan would be needed for November?

If the actual A/R at the end of February was $12,000 and projected sales in March are $50,000, where 70% of sales are on credit, 60% of credit sales are collected in the month of the sale, and 40% are collected in the month after the sale, what amount of cash is collected during March?

If Excel Inc. has projected sales of $30,000 in January, $20,000 in February, and $20,000 in March, where 80% of sales are on credit, 20% are collected in the month of sale, and 80% are collected the month after, what are the cash receipts in March?