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COLLEGE FINANCE Level 1 Eli Lilly is very excited because sales for his nursery and plant company are expected to increase from $620,000 to $1,320,000
COLLEGE FINANCE Level 1
Eli Lilly is very excited because sales for his nursery and plant company are expected to increase from $620,000 to $1,320,000 next year. Elis net assets (assets liabilities) will remain at 50 percent of sales. His firm will enjoy an 6 percent return on total sales. He will begin the year with $150,000 in the bank and is already bragging about the Jaguar and luxury townhouse he will buy. |
a. | Does his optimistic outlook for his cash position appear to be justified? | ||
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b. | Compute the likely cash balance for the end of the year. (Negative answers should be indicated by a minus sign.) |
$ __________
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