A firm pays $100 in period 1 to produce some goods. It sells those goods for $ 150 in period 2 but does not collect payment from its customers until period 3. Calculate the cash flows to the firm in each period by completing the following table. Do the resulting values for net cash flow in each period make sense?
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Period: |
1 |
2 |
3 |
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Sales |
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Change in accounts receivable |
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Cost of goods sold |
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Change in inventories |
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Net cash flow |