Baseball Card Land, Inc. sells baseball cards and other memorabilia. The company tries to maintain a cash balance equivalent to approximately 30 days of sales. Sales in 2006 amounted to $352,412 and the company expects growth in 2007 of 33% and in 2008 of 40%. Given the information provided about Baseball Card Land what is the company's 2008 projected cash balance?

Question

Quizplus · Accepted Answer

To find the 2008 projected cash balance, first calculate the 2008 sales: $352,412 * 1.33 * 1.40 = $655,964. Then, find the daily sales: $655,964 / 365 = $1,797.17. The cash balance for 30 days of sales is $1,797.17 * 30 = $53,934.