Regular Production Costs $13 Per Unit and Selling a Unit

question 31

Multiple Choice

Regular production costs $13 per unit and selling a unit represents a cash inflow of $28 per unit. Assume that all units reflected on the forecast will be sold. What is the cumulative net cash flow through March? $$\begin{array} { | l | c | c | } \hline{ \text { Month } } & \text { Forecast } & \text { Regular Production } \\\hline \text { Tanuary } & 250 & 250 \\\hline \text { February } & 200 & 200 \\\hline \text { March } & 300 & 300 \\\hline \text { April } & 400 & 400 \\\hline\end{array}$$

• A)$11,250
• B)$4,500
• C)$8,400
• D)$3,900

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Definitions:

Intention

An element of a valid contract; the parties must objectively intend for an agreement to be legally binding.

Reasonable Person

A hypothetical individual in the legal system who exercises average care, skill, and judgment in conduct and is used as a comparative standard for negligence.

Valid Contract

An agreement that is legally binding on both parties.

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