Home Corporation Will Open a New Store on January 1

question 47

Multiple Choice

Home Corporation will open a new store on January 1.Based on experience from its other retail outlets,Home Corporation is making the following sales projections: Home Corporation estimates that 70% of the credit sales will be collected in the month following the month of sale,with the balance collected in the second month following the month of sale. In a cash budget for April,the total cash receipts will be:

• A)$74,000
• B)$57,000
• C)$114,000
• D)$97,000

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Definitions:

Absolute Value

A mathematical function that removes any negative sign in front of a number, effectively measuring the distance of the number from zero.

Correlation

A statistical measure that describes the extent to which two variables change together, but not necessarily indicating causation.

Prediction Error

The difference between observed values and the values predicted by a model.

Intercept

In mathematics and statistics, the point at which a line or curve intersects a given axis on a graph.