Question :
Silly Sally, Inc.
Silly Sally, Inc. forecasts the following sales levels: : 1325760
Silly Sally, Inc.
Silly Sally, Inc. forecasts the following sales levels: January, $420; February, $435; March, $450; and April, $470. Historically, 40% of its sales are for cash. Of the remaining sales, 80% are collected in one month, 15% are collected in the second month, while the rest remain uncollected. November sales were $380 and December sales were $500. (all values $000)
Purchases are made at 60% of the next month’s sales forecast, and are paid for in the month of purchase. Other cash outlays are: rent, $10 monthly; wages and salaries, $50 monthly; a tax payment of $30 in March; an interest payment of $15 in March; and a planned purchase of $20 of new fixed assets in January.
43.Refer to Silly Sally, Inc. What is the forecasted amount to be collected from cash sales in March?
a.$450
b.$360
c.$261
d.$180
44.Refer to Silly Sally, Inc. What are forecasted total cash collection for January?
a.$420
b.$442
c.$168
d.$240
45.Suppose Silly Sally, Inc. forecasts an ending cash balance of $20, its minimum desired balance, in January. If February’s forecasted cash expenditures are $400, which of the following describes the changes to Silly Sally’s cash balance and level of borrowing, if any, related to its minimum cash balance, at the end of February?
a.net cash flows of $21; borrowing will increase $21
b.net cash flows of $21; borrowing will decrease $21
c.net cash flows of $11; borrowing will increase $9
d.net cash flows of $11; borrowing will decrease $9
46.What are Silly Sally’s forecasted cash outflows for February?
a.$270
b.$330
c.$395
d.$450
47.What is Silly Sally’s change in cash for March?
a.$40 increase in cash
b.$40 decrease in cash
c.$85 increase in cash
d.$20 increase in cash
48.Suppose Silly Sally experiences a change in customer payment patterns in accounts receivable, so that payments are now 30% in cash, and of the credit sales, 60% are collected in one month, 35% are collected in the second month, with the rest uncollected. What is the new forecasted collection for January, and how much is this different from the original forecast?
a.$408; $72 higher
b.$336; $93 lower
c.$442; $13 higher
d.$429; $13 lower
49.Consider the following information for Smart Products: total assets=$1000; sales=$1540; net profit margin=12%; dividend payout ratio=40%; accounts payable=$308. If sales are forecast to increase 30%, what is the “short cut” estimate of external funds required (EFR)?
a.$64
b.$208
c.$300
d.$462
50.Consider the following information for Smart Products: total assets=$1000; sales=$1540; net profit margin=12%; dividend payout ratio=40%; equity=$555. What is Smart Products’ sustainable growth rate?
a.7%
b.13%
c.25%
d.52%
51.Financial planning encompasses all but the following:
a.setting long-run strategic goals
b.investing the firms long-term cash
c.preparing quarterly and annual budgets
d.all of the above
52.Which of the following make(s) the planning process more complex than simply accepting all projects that look promising?
a.limits on capital
b.limits on production capacity
c.limits on human resources
d.all of the above
