NARRBEGIN: Total cash budget
Bavarian Brew's schedule of projected cash disbursement
All of Bavarian Brew's sales are credit sales.The company collects 60% of its sales in the next month and the remainder in the month after that.
The company's purchases are 75% of its sales.Of those purchases 15% are paid in cash,50% are paid in the following month and the remainder in the month after that.The company's wages and salaries equal 15% of sales each month plus $50.Taxes of $125 are due in April.The company is going to purchase new machinery worth $1000 in March and pay 50% right away and the rest in April.In addition,the company will pay a $175 dividend in February.
-Due to a change in economic conditions Bavarian Brew will only be able to collect 40% of its March sales in April.What is company's cash net cash flow in April as a result of this change?

Question

NARRBEGIN: Total cash budget
Bavarian Brew's schedule of projected cash disbursement
  All of Bavarian Brew's sales are credit sales.The company collects 60% of its sales in the next month and the remainder in the month after that.
The company's purchases are 75% of its sales.Of those purchases 15% are paid in cash,50% are paid in the following month and the remainder in the month after that.The company's wages and salaries equal 15% of sales each month plus $50.Taxes of $125 are due in April.The company is going to purchase new machinery worth $1000 in March and pay 50% right away and the rest in April.In addition,the company will pay a $175 dividend in February.
-Due to a change in economic conditions Bavarian Brew will only be able to collect 40% of its March sales in April.What is company's cash net cash flow in April as a result of this change?

Quizplus · Accepted Answer

in .4(870)+ .4(450)= 528
out: (.35)(.75)(870)+ (.5)(.75)(450)+ (.15)(.75)(600)+ 50 + (.15)(600)+ 125 + (.5)(1000)= 1229.63
net 528-1229.63 = -701.63

NARRBEGIN: Total Cash Budget