14. Cash Flows. Ponzi Products produced 100 chain letter kits this quarter, resulting in a total cash
Question:
14. Cash Flows. Ponzi Products produced 100 chain letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of the kits next quarter at a price of $11, and the other 50 kits in two quarters at a price of $12. It takes a full quarter for it to collect its bills from its cus- tomers. (Ignore possible sales in earlier or later quarters.)
a. Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes. (LO1)
b. What are the cash flows for the company today and in each of the next three quarters? (LO3)
c. What is Ponzi's net working capital in each quarter? (LOI)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
Question Posted: