COGS are 80% of Sales. You collect 80% of sales in the month of sale and the remaining 20% in the month following the sale. You purchase 60% of your COGS in the month of sale and 40% in the month prior to the sale. You pay for 70% of purchases in the month that it is purchased and the remaining 30% in the month after it is purchased.

	Dec	Jan	Feb	March
Sales	10000	7000	6000	5000
Cost of Goods Sold	8000	5600	4800	4000
Cash Received				5200
Purchases	7040	5280	4480
Cash Used		5808		4368
Cash Generated by operations				832
Cash	1000	2792		5104
Accounts Receivable	6000		5200	5000
Inventory	2800	2480	2160	2480
Accounts Payable	4760		3992	3944

12. How much was Cash Generated by Operations in February?

a. 1480 b.2320 c.2840 d.3260

13. What is the Accounts Receivable balance in January?

a.5400 b. 5800 c. 6200 d. 6600

14. What is the nominal cost of a six-month discount loan of $200,000 with a stated rate of 8% if there are $500 in closing costs due at the beginning?

a.8.48% b. 8.88% c. 9.07% d. 9.36%

15. What is the Effective cost of trade credit if the terms are 2/15, net 50 assuming that you forego the discount and pay on the 50^th day?

a.12.3% b. 15.8% c. 18.6% d. 23.5%