Question 3 - Week 6 (11 marks) A new company, is being established to manufacture and sell an electronic tracking device: the Trackit. The owners are excited about the future profits that the business will generate. They have forecast that sales will grow to 2,600 Trackits per month within five months and will be at that level for the remainder of the first year. The owners will invest a total of $250,000 in cash on the first day of operations (that is the first day of July). They will also transfer non-current assets into the company. Extracts from the company's business plan are shown below. Sales The forecast sales for the first five months are: Month Trackits (units) July 1,000 August 1,500 September 2,000 October 2,400 November 2,600 The selling price has been set at $140 per Trackit. Sales receipts Sales will be mainly through large retail outlets. The pattern for the receipt of payment is expected to be as follows: Time of payment % of sales value Immediately 15 * One month later 25 Two months later 40 Three months later 15 The balance represents anticipated bad debts. * A 4% discount will be given for immediate payment Production The budget production volumes in units are: July August September October 1,450 1,650 2,120 2,460