MDU,A Michigan-based general contractor,bills its clients on the first of the month.Clients traditionally pay as follows: 60% pay by the end of the first month,30% by the end of the second month,7% by the end of the third month,and 3% default on their bills.For example,a $1.00 sale made in the month of July is billed August 1st and $0.60 is paid in August,etc.The firm's CEO wants to know the anticipated cash flow for the second quarter.Use the following information to estimate second-quarter cash flows. $$\begin{array} { | l | l | l | l | l | l | }
\hline &{ \text { First-Quarter Actual Sales } } & && { \text { Second-Quarter Anticipated Sales } } \
\hline \text { Month } & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \
\hline \text { Sales } & \$ 400,000 & \$ 250,000 & \$ 475,000 & \$ 625,000 & \$ 825,000 & \$ 825,000 \
\hline
\end{array}$$

Question

MDU,A Michigan-based general contractor,bills its clients on the first of the month.Clients traditionally pay as follows: 60% pay by the end of the first month,30% by the end of the second month,7% by the end of the third month,and 3% default on their bills.For example,a $1.00 sale made in the month of July is billed August 1st and $0.60 is paid in August,etc.The firm's CEO wants to know the anticipated cash flow for the second quarter.Use the following information to estimate second-quarter cash flows. $$\begin{array} { | l | l | l | l | l | l | } 
\hline  &{ \text { First-Quarter Actual Sales } } & && { \text { Second-Quarter Anticipated Sales } } \
\hline \text { Month } & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \
\hline \text { Sales } & \$ 400,000 & \$ 250,000 & \$ 475,000 & \$ 625,000 & \$ 825,000 & \$ 825,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of MDU,A Michigan-based general contractor,bills its clients on the first of the month.Clients traditionally pay as follows: 60% pay by the end of the first month,30% by the end of the second month,7% by the end of the third month,and 3% default on their bills.For example,a $1.00 sale made in the month of July is billed August 1st and $0.60 is paid in August,etc.The firm's CEO wants to know the anticipated cash flow for the second quarter.Use the following information to estimate second-quarter cash flows. $$\begin{array} { | l | l | l | l | l | l | } 
\hline  &{ \text { First-Quarter Actual Sales } } & && { \text { Second-Quarter Anticipated Sales } } \
\hline \text { Month } & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \
\hline \text { Sales } & \$ 400,000 & \$ 250,000 & \$ 475,000 & \$ 625,000 & \$ 825,000 & \$ 825,000 \
\hline
\end{array}$$

MDU,A Michigan-Based General Contractor,bills Its Clients on the First of the Month.Clients