Table 4.3
The financial analyst for Sportif, Inc. has compiled sales and disbursement estimates for the coming months of January through May. Historically, 75 percent of sales are for cash with the remaining 25 percent collected in the following month. The ending cash balance in January is $3,000.
-The net cash flow for February is ________. (See Table 4.3)

Question

Table 4.3
The financial analyst for Sportif, Inc. has compiled sales and disbursement estimates for the coming months of January through May. Historically, 75 percent of sales are for cash with the remaining 25 percent collected in the following month. The ending cash balance in January is $3,000. 
-The net cash flow for February is ________. (See Table 4.3)

Quizplus · Accepted Answer

- 75% of sales in February (estimated to be $15,000) will result in cash receipts of $11,250 ($15,000 x 0.75)
- The remaining 25% of sales will be collected in March
- Disbursements for February are estimated to be $17,500
- Therefore, the net cash flow for February is -$6,250 ($11,250 - $17,500)
- Adding this to the beginning cash balance of $3,000 results in an ending cash balance of -$3,250
- Therefore, the correct answer is A) -$1,250, as it represents the net cash flow for February.

Table 4.3 the Financial Analyst for Sportif, Inc. Has Compiled Sales and Sales