Define nursery and plant company are expected to double

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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 records that net assets (Assets - liabilities) will remain at 50 percent of sales. His firm will relish an 8 percent return on local sales. He will begin the year with $120,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy. Does his optimistic view for his cash position appear to be correct? Calculate his likely cash balance or deficit for the end of the year. Start with beginning cash as well as subtract the asset build up (equal to 50 percent of the sales increase) and add in profit

Reference no: EM1397342

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