A Company Is Formulating Its Plans for the Coming Year,including

question 72

Multiple Choice

A company is formulating its plans for the coming year,including the preparation of its cash budget.Historically,the company's sales are 30% cash.The remaining sales are on credit with the following collection pattern: Sales for the first 5 months of the coming year are forecast as follows:
For the month of April,the total cash receipts from sales and collections on account would be (CIA adapted)

• A)$3,729,968
• B)$3,781,600
• C)$4,025,200
• D)$4,408,000

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Mortgagor

The borrower in a mortgage agreement, who pledges property to the lender as security for the loan.

Fixed Rate

An interest rate that remains constant over the duration of the loan, bond, mortgage, or any financial product.

Loan

A sum of money that is borrowed, typically from a financial institution, which is expected to be paid back with interest.