Question 1

a. Your sales will increase in the coming year by $100,000 and you have a 30 percent gross margin. How much will the new sales cost you in terms of COGS?

b. If additional overhead to support these new sales is $15,000, what is the total cost of the new sales next year?

c. How much is this per day (nearest dollar)?

d. If your average collection time to receive cash from sales is 60 days and you add an additional 20% to this time as a factor of safety, provide a quick and dirty estimate of additional cash needed to support the new sales.