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.
-What is Bavarian Brew's expected net cash flow in March?

Question

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.
-What is Bavarian Brew's expected net cash flow in March?

Quizplus · Accepted Answer

in: (.6)870 + .4(510)= 726
out: (.35)(.75)(510)+ (.5)(.75)870 + (.15)(.75)450 + 50 + 450(.15)+ 1000(.5)= 1128.25
net = 726-1128.25 = -402.25

Bavarian Brew's Schedule of Projected Cash Disbursement