{"id":33579,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/answer-questions-2"},"modified":"2017-08-16T06:20:03","modified_gmt":"2017-08-16T06:20:03","slug":"answer-questions-2","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/answer-questions-2\/","title":{"rendered":"answer questions"},"content":{"rendered":"<div class=\"the_content_wrapper\">\n<p>answer questions<\/p>\n<p>Assumptions<br \/> 1. Sales in month 1 are $100,000.<br \/> 2. Sales increase each month by 1.0 percent over the previous month.<br \/> 3. Gross margin is 45.0 percent.<br \/> 4. Sales expense is 10.0 percent of sales.<br \/> 5. General and administrative expense in month 1 is $32,500.<br \/> 6. General and administrative expenses increase each month by 0.5 percent over the previous month.<br \/> 7. The income tax rate is 42.0 percent.<br \/> 8. Days inventory is 90.0.<br \/> 9. All months have 30 days.<br \/> 10. No receivables are collected in the month of the sale.<br \/> 11. Seventy percent of receivables are collected in the month subsequent to the sale.<br \/> 12. Eighty-five percent of receivables are collected within two months of the sale.<br \/> 13. Ninety-eight percent of receivables are collected within three months of the sale.<br \/> 14. Two percent of receivables are never collected.<br \/> 15. Bad debts are not included in either the sales or general and administrative expense.<br \/> 16. All payables for inventory are paid in the month subsequent to the purchase<br \/> 17. Sales and general and administrative expenses are paid in the month in which they are incurred.<br \/> 18. The debt to equity ratio is to be maintained at a maximum of 2.0.<br \/> 19. Interest on the long term debt is 5.0 percent annual rate payable in the month it was incurred.<br \/> 20. All debt is incurred prior to the first sale.<br \/> 21. Interest expense is not included in either the sales or general and administrative expense.<br \/> 22. No principal payments will be made on the debt until there is positive cash flow.<br \/> 23. Income tax estimated payments are made in the fourth, seventh, tenth and the first month of the subsequent year for the previous three months.<br \/> 24. The owner would prefer to invest the minimum possible and is the only investor.<br \/> 25. No dividends will be paid until cash flow from operations exceeds $85,000 per month.<\/p>\n<p>What is the minimum she needs to invest so the business does not ever have a negative cash balance. Round all calculations to the nearest dollar. Upload all answers<br \/> to Canvas.<\/p>\n<p>You can do this problem any way that you want but I thought it might be helpful to tell you how I solved it.<br \/> 1. Calculated net income for each month. Twenty-four will be plenty.<br \/> 2. Determined net cash inflows and outflows from operations to see how much was needed each month.<br \/> 3. Divided the cumulative cash needed between equity and debt based on the debt to equity ratio. (Remember that accounts payable is debt.)<br \/> 4. Used a \u201cwhat-if\u201d to determine the amount of debt required so the minimum cash balance was zero.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>answer questions Assumptions 1. Sales in month 1 are $100,000. 2. Sales increase each month by 1.0 percent over the previous month. 3. Gross margin is 45.0 percent. 4. Sales expense is 10.0 percent of sales. 5. General and administrative <a href=\"https:\/\/www.benedictsol.com\/blogs\/answer-questions-2\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-33579","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/33579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=33579"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/33579\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=33579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=33579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=33579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}