Marcus Homer , a college student, plans to sell CD players over the internet & by mail order during the semester to help
Posted: Sat May 07, 2022 7:40 pm
Marcus Homer , a college student, plans to sell CD players over
the internet & by mail order during the semester to help pay
his expenses. He buys the players for $28 & sells them for $52.
If payment by cheque accompanies the mail order (estimated to be
30% of sales), he gives 10% discount. If customers include a credit
card number for either internet or mail order (estimated 40% of
sales), they receive 5% discount. The remaining collections are
estimated as follows: One month following 15% Two months following
9% Three months following 6% Sales forecast are as follows:
September 160 units October 240 units November 360 units December
440 units January Business terminated Marcus plans to pay his
supplier 55% in the month of purchase, and 45% in the following
month. A 5% discount is granted on payments made in the month of
purchase. However, Marcus will not be able to take any discounts on
the September purchases because of cashflow constraints. All
September purchases will be paid for in October. 3 Marcus has 60
players on hand (purchased in August and to be paid in September),
and plans to maintain enough end-of-month inventory to meet 50% of
the next month’s sales. Marcus also wished to maintain a closing
cash balance of $2,500 in the bank once the business commences in
September. The current interest rate on short term loans is 3 %
pa.
the internet & by mail order during the semester to help pay
his expenses. He buys the players for $28 & sells them for $52.
If payment by cheque accompanies the mail order (estimated to be
30% of sales), he gives 10% discount. If customers include a credit
card number for either internet or mail order (estimated 40% of
sales), they receive 5% discount. The remaining collections are
estimated as follows: One month following 15% Two months following
9% Three months following 6% Sales forecast are as follows:
September 160 units October 240 units November 360 units December
440 units January Business terminated Marcus plans to pay his
supplier 55% in the month of purchase, and 45% in the following
month. A 5% discount is granted on payments made in the month of
purchase. However, Marcus will not be able to take any discounts on
the September purchases because of cashflow constraints. All
September purchases will be paid for in October. 3 Marcus has 60
players on hand (purchased in August and to be paid in September),
and plans to maintain enough end-of-month inventory to meet 50% of
the next month’s sales. Marcus also wished to maintain a closing
cash balance of $2,500 in the bank once the business commences in
September. The current interest rate on short term loans is 3 %
pa.