Avril Company makes collections on sales according to the below schedule. The Treasury Manager conducts an analysis of the cash collection and determines that cash collection target for Feb should be 100,000 and March should be $105,500. Evaluate whether the collection target for March is correct and summarize your recommendations. (2 Marks each * 5 = 10 marks)

Month	Expected Sales
January	$ 100,000
February	$ 120,000
March	$ 110,000

65% in the month of sale

20% in the month following sale

10% in the second month following sale

The collection amount for January is:

a.

$ 65,000

b.

$ 30,000

c.

$ 70,000

The collection amount for February is:

a.

$ 84,000

b.

$ 104,000

c.

$98,000

The collection amount for March is:

a.

$105,500

b.

$ 113,000

c.

$ 125,000

Is the collection target for February correct?

a.

Not Correct

b.

Not sure

c.

Correct

Is the collection target for March correct?

a.

Not Correct

b.

Not sure

c.

Correct