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You manager wants you to put together a 4 month cash budget from January to April based on the following information. Unit sales for January
You manager wants you to put together a 4 month cash budget from January to April based on the following information.
- Unit sales for January = $10,000, Feb = 11,200, Mar =12,544, Apr = 14,049
- Selling price per unit is $3.05. Sales are 50% credit and 50% cash. Sales terms are net 30 days
- Cost of Goods per unit is $1.95. Terms of Purchase are net 30 days
- Opening Accounts Payable balance in January is $5,000 and the Opening Cash balance is 10,000
- A minimum cash balance of $3,000 is required at all times
- Expenses are 45% of Sales and are paid in the month they are incurred
- The company will be purchasing new equipment for $12,000 and must pay for in in January
What recommendations would you provide based on the results of this cash budget
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