11-A company had 30 million in total sales last year and expects 40 million in total sales this year. Ten percent of each year’s sales are on credit that will he paid the following year. The company anticipates the following expenses for this year: Depreciation of 5 million  Labor materials taxes and other expenses of 51 million Assume the company begins this year with a zero cash balance. At the end of this year, the company will have a cash deficit of:  A. 8 million  B. 12 million  C. 15 million  D. 17 million

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 20P
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11-A company had 30 million in total sales last year and expects 40 million in total sales this year. Ten percent of each year’s sales are on credit that will he paid the following year. The company anticipates the following expenses for this year:

Depreciation of 5 million 

Labor materials taxes and other expenses of 51 million

Assume the company begins this year with a zero cash balance. At the end of this year, the company will have a cash deficit of: 

A. 8 million 

B. 12 million 

C. 15 million 

D. 17 million 

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