Ponzi Products produced 80 chain-letter kits this quarter, resulting in a total cash outlay of $12...

Ponzi Products produced 80 chain-letter kits this quarter, resulting in a total cash outlay of $12 per unit. It will sell 40 of the kits next quarter at a price of $13, and the other 40 kits in the third quarter at a price of $14. It takes a full quarter for Ponzi to collect its bills from its customers. (Ignore possible sales in earlier or later quarters.) (Negative amount should be indicated by a minus sign.)

a. What is the net income for Ponzi next quarter?

b. What are the cash flows for the company this quarter?

c. What are the cash flows for the company in the third quarter?

d. What is Ponzi’s net working capital in the next quarter?

Expert Solution

jeff jeffy answered 2 years ago

Ponzi Products produced 90 chain letter kits this quarter, resulting in a total cash outlay of...

Ponzi Products produced 90 chain letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 45 of the kits next quarter at a price of $11, and the other 45 kits in two quarters (in Quarter 3) at a price of $12. It takes a full quarter for it to collect its bills from its customers. (Ignore possible sales in earlier or later quarters and assume all positive cash flow is distributed as...

Ponzi Products produced 88 chain-letter kits this quarter, resulting in a total cash outlay of $11...

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