Consider the Cash Receipts Projections of Roxy Inc

question 6

Multiple Choice

Consider the cash receipts projections of Roxy Inc.that is developing a cash budget for October ,November and December; sales in August and September were $600,000 and $500,000 respectively.The forecast sales are $400,000,$300,000 and $200,000 for October,November and December respectively.20 % of sales are cash sales and 80% are credit sales; collects about 70% of each month's sales in the next month but waiting until the following month for the remaining 10% of sales.Bad debts are negligible.The Firm is expectsing cash dividend of $10,000 in December from a subsidiary.What are the total cash receipts in October? (In thousands)

• A) $330
• B) $490
• C) $255
• D) $ 60

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Definitions:

Minimum

The lowest point on a nonlinear curve, where the slope changes from negative to positive.

Economic Profit

The difference between the total revenue received by a business and the total implicit and explicit costs of a business.

ATC

Average Total Cost, which is the sum of all production costs divided by the quantity of output produced.

Economic Profits

Profits exceeding the opportunity costs of a company; considered an indicator of efficiency and entrepreneurship.