Calculate the average net cash flow during the month

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Tierney Enterprises is constructing its cash budget. Its budgeted monthly sales are $5,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2.5% discount, while the remaining 55% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month’s sales are constant at 40% of projected sales for the next month. Other payments, which include wages, rent, and taxes, are 45% of sales for the current month. Construct a cash budget for a typical month and calculate the average net cash flow during the month.

Reference no: EM13836249

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