Question

In: Finance

ABC Company has the following projected sales: Month      Sales Jan         $5,000 Feb         $14,000...

ABC Company has the following projected sales:

Month      Sales
Jan         $5,000
Feb         $14,000
Mar         $27,000
Apr         $56,000


14% of the sales are collected in the same month. 26% of the sales are collected after one month, 42% of the sales are collected after two months, and the remainder are collected after three month. What is the amount of the April collections?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12,345.678 then enter as "12345.68" in the answer box.

Solutions

Expert Solution

In order to solve this question, we need to calculate the collections for each month starting from January to April, as we want the total collection for April. This could be easily calculated using Excel.

The calculation is as follows:

The formulas used are as follows:


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