Fulkron Manufacturing Provides the Following Data Excerpted from Its 3rd

question 55

Multiple Choice

Fulkron Manufacturing provides the following data excerpted from its 3rd quarter budget: $\begin{array}{|l|l|r|r|} \hline&{\text { Jul }} & \text { Aug } &{\text { Sep }} \\\hline \text { Cash collections } & \$ 66,000 & \$ 42,000 & \$ 45,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of inventory } & 50,000 & 48,000 & 25,000 \\\hline \text { Operating expenses } & 10,000 & 15,000 & 20,000 \\\hline \text { Capital expenditures } & 0 & 32,000 & 6,000\\\hline\end{array}$ The cash balance on June 30 is projected to be $10,000.
- Based on the above data, calculate the shortfall the company is projected to have at the end of August.

• A) $32,000
• B) $43,000
• C) $37,000
• D) $16,000

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Definitions:

Adverse Selection

A situation in which asymmetric information results in high-quality goods or high-quality consumers being squeezed out of transactions because they cannot demonstrate the quality of the product they are offering for sale.

Fair Bet

A wager in which the expected value to both parties involved is equal; no side has an advantage.

Standard 52-card Deck

A common set of playing cards used for a variety of games, consisting of four suits with thirteen ranks each.

Decreasing Slope

A downward trend on a graph indicating that one variable decreases as another variable increases.