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Calculating expected cash flow in the given months.

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Here is a forecast of sales by National Bromide for the first four months of 2010 (figures in $ thousands):

Month 1 Month 2 Month 3 Month 4
Cash Sales 15 24 18 14
Sales on credit 100 120 90 70

On average 50% of credit sales are paid for in the current month, 30% are paid in the next month, and the remainder is paid in the month after that.

What is the expected cash inflow from operations in months 3 and 4?

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Solution Summary

This solution calculates the expected cash inflow from operations in the given months.

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Expected cash inflow in month 3
=Cash sales in month 3+50% of credit sales in month ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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