A firm has actual sales in November of $1,000 and projected sales in December and January of $3,000 and $4,000, respectively. The firm makes 10 percent of its sales for cash, collects 40 percent of its sales one month following the sale, and collects the balance two months following the sale. The firm's total expected cash receipts in January

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The firm will collect 40% of its November sales in December, which is $400. It will also collect 40% of its December sales in January, which is $1,200. Finally, it will collect 10% of its January sales in January, which is $400. Therefore, the firm's total expected cash receipts in January are $400 + $1,200 + $400 = $2,100.

A Firm Has Actual Sales in November of $1,000 and Projected