business management 1 question

must show all work!!!!!!!!!!!!

19) Fielding Wilderness Outfitters had projected its sales for the first six months of 2008

to be as follows:

Jan.  $ 50,000  April  $180,000

Feb.  $ 60,000  May  $240,000

Mar.  $100,000  June  $240,000

Cost of goods sold is 60% of sales. Purchases are made and paid for two months prior to

the sale. 40% of sales are collected in the month of the sale, 40% are collected in the

month following the sale, and the remaining 20% in the second month following the sale.

Total other cash expenses are $40,000/month. The company’s cash balance as of March

1st, 2008 is projected to be $40,000, and the company wants to maintain a minimum

cash balance of $15,000. Excess cash will be used to retire short-term borrowing (if any

exists). Fielding has no short-term borrowing as of March 1st, 2008. Assume that the

interest rate on short-term borrowing is 1% per month. What was Fielding’s projected loss

for March?

a. $84,000

b. $110,000

c. $184,000

d. none of the above