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Compute the likely cash balance

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Eli Lilly is very excited because sales for his nursery and plant company are expected to increase from $560,000 to $1,200,000 next year. Eli's net asset s (Assets-Liabilities) will remain at 50 percent of sales. His firm will enjoy an 8 percent return on total sales. He will begin the year with $120,000 in the bank and is already bragging about the Jaguar and luxury townhouse he will buy. Does his optimistic outlook for his cash position appear to b justified? Compute the likely cash balance for the end of the year.

Reference no: EM132740276

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