Question
Working capital cash flow.Tires for Less is a franchise of tire stores throughout the greater Northwest. It has projected the unit sales and costs for
Working capital cash flow.Tires for Less is a franchise of tire stores throughout the greater Northwest. It has projected the unit sales and costs for each tire type for the next four months in the popup window:
Snow Tires | Rain Tires | All-Terrain Tires | All-Purpose Tires |
| |||||
Cost per tire | $40 | $30 | $48 | $35 | |||||
Sales: January | 40,000 | 19,000 | 5,000 | 61,000 | |||||
Sales: February | 38,000 | 34,000 | 4,100 | 54,000 | |||||
Sales: March | 13,000 | 45,000 | 9,000 | 51,000 | |||||
Sales: April | 2,100 | 20,000 | 9,000 | 65,000 |
. The company policy is to have the next month's anticipated sales for each tire type in the warehouse. Shipments are made to the various stores throughout the Northwest from the central warehouse. Calculate the monthly increase or decrease in cash flow for inventory for the first three months of the year given that an increase in inventory is a use of cash and a decrease in inventory is a source of cash.
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