1) You're going into business and need to set credit terms for your customers. Evaluate the following options and tell us which you feel would be best for your company and why? 4/10, 3/20, 2/30 or net 60. Why didn't you choose the other options? (Be sure to support your answer with concepts from this week's reading material
2) We learned about preparing budgets in chapter 15. What factors would go into your thought process for budgeting for the following expense line item - Employee Health Insurance? In other words, what would you look at in order to properly budget this expense line item? You should provide at least 3 factors.
3) We learned about cash budgets in chapter 15. Why do you suppose companies that prepare cash budgets take into consideration a minimum cash balance? Provide an example to support your explanation as to why companies maintain a minimum cash balance.
4) Let's take a look at budgeting for cash collections. Accrual based sales are $400,000 for December, $150,000 for January, $200,000 for February and $350,000 for March. Cash collections are as follows: 60% in the month of sale, 20% the following month and 15% two months after the month of sale. 5% are considered uncollectible. Based on the above information, what would be the total cash collections for the month of March? (Be sure to show your work)