A Company Has Forecast Sales in the First 3 Months

question 2

Multiple Choice

A company has forecast sales in the first 3 months of the year as follows (figures in millions) : January, $90; February, $20; March, $30. 70% of sales are usually paid for in the month that they take place and 30% in the following month. Receivables at the end of December were $20 million. What are the forecasted collections on accounts receivable in March?

• A) $27 million
• B) $50 million
• C) $23 million
• D) $35 million

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Definitions:

Rough Order Magnitude (ROM) Estimate

An early, approximate evaluation of the potential costs associated with a project, used for preliminary budgeting and planning purposes.

Ballpark Estimate

An approximate calculation or judgment of the value, number, quantity, or extent of something, intended to provide a rough understanding rather than precise accuracy.

Synchronous Communication

Synchronous communication refers to real-time exchanges where participants are present at the same time, such as in meetings or live chats.

Audio Conference

A telecommunication method that allows multiple people to participate in a conversation over audio channels without being in the same location.