... sets * April 3,000 sets * May 3,500 sets (materials paid for immediately). This trend is expected to continue for at least a year. Derek is encouraged that his January sales have not only made a good profit, but have increased the cash in the business. He sees this as a trend which will continue as sales increase, and would like to lease a new computer system for £2,000 a month, and now believes that there is enough cash being generated for him to commit the business to the deal for two years. Cash Generated by the Business in February as Compared to January At the end of trading in January the business had a closing bank balance of £7,000 and £3,000 in February. The business had failed to generate more cash in February than January by a difference of £4,000, even though sales receipts were the same in January and February of £8,000. The reason for the ...

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