Question
The company is constructing a corporate planning model. Cash sales are 40% of the company's sales with the remainder subject to the following collection pattern:
The company is constructing a corporate planning model. Cash sales are 40% of the company's sales with the remainder subject to the following collection pattern: 60% one month after sale, 30% two months after sales, 8% three months after sales, and 2% uncollectible. If 'Sn' is defined as total sales in month 'n,' which of the following expression correctly describes the company's collection on account in any given month?
a. 0.36Sn+1 + 0.18Sn+2 + 0.048Sn+3 b. 0.6Sn+1 + 0.3 Sn+2 + 0.08 Sn+3 c. 0.36Sn-1 + 0.18Sn-2 + 0.048Sn-3 d. 0.6Sn-1 + 0.3 Sn-2 + 0.08 Sn-3
PLEASE SHOW YOUR SOLUTION
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