1 . Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $ 600, 000 to $ 1, 200, 000 next year . Eli notes that net assets ( Assets - Liabilities ) will remain at 50 percent of sales . His firm will enjoy an 8 percent return on total sales . He will start the year with $ 120, 000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy . Does his optimistic outlook for his cash position appear to be correct ?" Compute his likely cash balance or deficit for the end of the year . Start with beginning cash and subtract the asset buildup lequal to 50 percent of the sales increase ) and add in profit