Question: eli lilly is very excited because sales for his nursery...
Eli Lilly is very excited because sales for his nursery and
plant company are expected to double from $600,000 to $1,200,000
next year. Eli notes that net assets (Assets − Liabilities) will
remain at 50 percent of sales. His firm will enjoy an 8 percent
return on total sales. He will start the year with $120,000 in the
bank and is bragging about the Jaguar and luxury townhouse he will
a. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 50 percent of the sales increase) and add in profit.