Problem:

The Dog House expects sales of $560, $650, $630, and $610 for the months of May through August, respectively. The firm collects 20 percent of sales in the month of sale, 70 percent in the month following the month of sale, and 8 percent in the second month following the month of sale. The remaining 2 percent of sales is never collected.

Required:

Question: How much money does the firm expect to collect in the month of August?

a. $639

b. $615

c. $643

d. $633

e. $628

Note: Provide support for your rationale.