Question
The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales
The management team of Magnificent Modems, Incorporated (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $10,000. Credit sales for January are expected to be $50,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $48,000.
Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 4 percent. The results below at a growth rate of 1 percent are shown as an example.
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