If a firm has $400,000 in credit sales and $100,000 in accounts receivable

1. Use the following information to answer this question: Bill’s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000; cost of goods sold, $140,000; rent, $18,000; utilities, $8,400; insurance, $2,000; depreciation on equipment, $3,500; and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change; however, Bill’s loan amortization schedule indicates that interest expense next year will be $9,000. Pro forma sales for Bill’s second year of operation is __________.

   $40,000.

   $200,000

   $240,000

   $220,000

2 points

Question 26

1. Use the following information to answer this question: Bill’s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000; cost of goods sold, $140,000; rent, $18,000; utilities, $8,400; insurance, $2,000; depreciation on equipment, $3,500; and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change; however, Bill’s loan amortization schedule indicates that interest expense next year will be $9,000. The projected rent expense for Bill’s second year of operation is __________.

   $18,000.

   $18,540.

   $23,400.

   $19,800.

2 points

Question 27

1. Use the following information to answer this question: Bill’s Furniture has just completed the first year of operation for his business and has the following information: sales, $200,000; cost of goods sold, $140,000; rent, $18,000; utilities, $8,400; insurance, $2,000; depreciation on equipment, $3,500; and interest, $10,000. Your forecast indicates that your sales will increase by 20%. Your rental agreement provides for a 3 increase percent per year. Bill has just read an article indicating that utility costs in his area will increase by 10% next year. Also, Bill just received a notice from his insurance company stating that his quarterly premium will increase to $600 beginning the first quarter of next year. The depreciation expense on the equipment will not change; however, Bill’s loan amortization schedule indicates that interest expense next year will be $9,000. Pro forma net income for Bill’s Furniture in the second year is __________.

   $18,100.

   $30.160.

   $21,720.

   $29,320.

1. 1. Which of the following statements about forecasting is false?

      Product life cycle influences the length of the forecast.

      The forecasting horizon should be at least as long as your strategic plan.

      The longer the time horizon the more accurate the forecast will be.

      The longer the time horizon the more inaccurate the forecast will be.

      There is an inverse relationship between forecast accuracy and time.

   2 points

   Question 18

   1. Which of the following is the most appropriate firm to use the survey of sales force?

      Ace Hardware

      Best Buy

      Burger King

      IBM

      K-Mar