LPD Logistics,Inc

question 123

Multiple Choice

LPD Logistics,Inc.'s projected sales for the first six months of 2010 are given below. 20% of sales are collected in the month of the sale,75% are collected in the month following the sale,and 5% are written off as uncollectible.Cost of goods sold is 80% of sales.Purchases are made the month prior to the sales and are paid during the month the purchases are made (i.e.goods sold in March are bought and paid for in February) .Total other cash expenses are $35,000/month.The company's cash balance as of February 1,2010 will be $30,000.Excess cash will be used to retire short-term borrowing (if any) .LPD has no short term borrowing as of February 28,2010.Assume that the interest rate on short-term borrowing is 1% per month.The company must have a minimum cash balance of $20,000 at the beginning of each month.What is LPD's projected gross profit for April?

• A)($50,000)
• B)$70,000
• C)$100,000
• D)$110,550

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Definitions:

20th Century Contract Law

The body of law governing agreements between parties, including principles of formation and enforcement, developed during the 20th century.

Large Corporations

Businesses that operate on a large scale with significant assets, revenues, and employee numbers, often influencing market trends and economic policies.

20th Century Contract Law

The legal principles and rules governing contracts that were developed and evolved during the 20th century, focusing on agreements, obligations, and remedies for breach.

Subjective Standard

A criterion for judgment based on personal feelings, tastes, or opinions rather than external facts.