Answer the Following Questions Using the Information Below:
the Following

question 42

Multiple Choice

Answer the following questions using the information below:
The following information pertains to Hepburn Company:
$$\begin{array} { l r r } \text { Month } & \text { Sales } & \text { Purchases } \\\text { January } & \$ 60,000 & \$ 32,000 \\\text { February } & \$ 80,000 & \$ 40,000 \\\text { March } & \$ 100,000 & \$ 56,000\end{array}$$ - Cash is collected from customers in the following manner:
Month of sale $\quad 30 \%$
Month following the sale $70 \%$
- $40 \%$ of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
- Labor costs are $20 \%$ of sales. Other operating costs are $\$ 30,000$ per month (including $\$ 8,000$ of depreciation) . Both of these are paid in the month incurred.
- The cash balance on March 1 is $\$ 8,000$ . A minimum cash balance of $\$ 6,000$ is required at the end of the month. Money can be borrowed in multiples of $\$ 1,000$ .
-How much cash will be disbursed in total in March?

• A) $42,000
• B) $50,000
• C) $88,400
• D) $96,400

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Definitions:

Market Risk

The risk of losses in investments caused by factors affecting the entire market or economy, such as recessions or political instability.

Probability Distribution

A statistical model that demonstrates all possible values and their likelihoods for a random variable across a certain range.

Market Risk

The potential for investors to experience losses due to factors that affect the overall performance of the financial markets, such as economic downturns or fluctuations in interest rates.

Business Risk

The possibility of loss resulting from the day-to-day operations of a business, which can be influenced by numerous factors including market conditions, production costs, and management decisions.