Question

1.The sales for October, November, and December are (6 * 1000, $ 33,000, and $54,000, respectively. For any particular sales month, the company receives the following percentages over time in cash: 20% in cash from that same month’s sales, 50% in cash from the previous month’s sales, and 30% in cash from the sales from two months ago. What amount of cash will the company receive during December?

2.Sales forecast based on external data. Raspberry Phones uses external data to forecast the coming year’s sales. The company has (6%) of all newphone sales in the United States and 7% of all replacement-phone sales. Industry forecasts predict 2 million new-phone buyers and 3 million replacement-phone buyers in 2014. If the average Raspberry phone costs $195,00 what sales revenue is the company forecasting for 2014?

Answer 1

1. October sales = 6*1000 = $6000

November sales = $33000

December sales = $54000

December cash collection = 20% of December sales + 50% cash from November sales + 30% cash from October sales

December cash collection = 20% of $54000 + 50% of $33000 + 30% of $6000

December cash collection = $10800 + $16500 + $1800 = $29100

2. Forecasted new phone sales = 6%

New phone buyers = 2m = 2000000

Forecasted new phone sales (in units) = 6% * 2000000 = 120000

Cost price of the phone = $195

Forecasted new phone sales (in $) = 120000 * $195 = $23400000

Forecasted Replacement phone sales = 7%

Replacment phone buyers = 3m = 3000000

Forecasted new phone sales (in units) = 7% * 3000000 = 210000

Cost price of the phone = $195

Forecasted new phone sales (in $) = 210000 * $195 = $40950000