Here is a forecast of sales by National Bromide for the firs

Here is a forecast of sales by National Bromide for the first 4 months of 2017 (figures in thousands of dollars): Month: 1 2 3 4 Cash sales 16 25 19 15 Credit sales 105 125 95 75 On average, 60% of credit sales are paid for in the current month, 20% in the next month, and the remainder in the month after that. What are the expected cash collections in months 3 and 4?

Solution

cash collection in month 3 = 60%*95 + 20%*125 + 20%*105 + cash sales = 103 + 19 = 122

cash collection in month 4 = 60%*75 + 20%*95 + 20%*125 + cash sales = 89 + 15 = 104