Problema Solution
Blue & Noble is a small law firm that does all of its business through billings (no cash sales). Historically, the firm has collected 40% of its revenue in the month of billing, 50% during the first month after billing, and 8% during the second month after billing. Two percent typically remains uncollectible. Revenue projections for the coming year are $47,500 for January and $50,000 for February. Cash receipts of $50,600 are expected in March. What revenues are projected for March?
Answer provided by our tutors
$50,600 = .4(March Rev.) + .5($50,000) + .08($47,500)
$50,600 = .4 (March Rev) + $25,000 + $3,800
$21,800 = .4(March Rev.)
March Rev = $54,500