Question

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:

	Q1			Q2			Q3			Q4
Sales	$	105		$	125		$	145		$	175

Sales for the first quarter of the following year are projected at $120 million. Accounts receivable at the beginning of the year were $47 million. Wildcat has a 45-day collection period.

Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $11 million per quarter.

Wildcat plans a major capital outlay in the second quarter of $60 million. Finally, the company started the year with a $66 million cash balance and wishes to maintain a $40 million minimum balance.

a-1.

Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

        

a-2.	What is the net cash cost for the year under this target cash balance? (A negative answer should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

        

b-1.

Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

        

b-2.	What is the net cash cost for the year under this target cash balance? (Enter your answer in millions. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

        

Answer 1

PART-a

Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Opening Balance	$      66.00	$      40.00	$      40.00	$      61.60
Cash Inflow
Sales	$      52.50	$      62.50	$      72.50	$      87.50
Accounts Receivable received	$      47.00	$      52.50	$      62.50	$      72.50
Interest Received @2%	$            -	$        1.20	$        1.20	$        1.20
Total Cash Inflow	$      99.50	$    116.20	$    136.20	$    161.20
Cash Outflow
Purchases	$      33.75	$      39.15	$      47.25	$      32.40
Accounts Payable paid	$            -	$      22.50	$      26.10	$      31.50
Wages Taxes and Other Expenses	$      21.00	$      25.00	$      29.00	$      35.00
Interest and Dividends	$      11.00	$      11.00	$      11.00	$      11.00
Capital Outlay	$            -	$      60.00	$            -	$            -
Interest Paid on Borrowings @3%	$            -	$            -	$        1.24	$        1.24
Total Cash Outflow	$      65.75	$    157.65	$    114.59	$    111.14
Balance	$      99.75	$       -1.46	$      61.60	$    111.65
Borrowing to maintain minimum balance		$      41.46
Deposited in Bank	$      59.75
Closing Balance	$      40.00	$      40.00	$      61.60	$    111.65

Notes:

1.Assumed that sales and purchases are evenly spread.

2. Accounts receivable of Quarter are received in the next quarter.

3. Accounts payable of Quarter are paid in the next quarter.

4. Interest on Deposit @2% and not withdrawed in next quarters.

5. Interest on borrowing @3% and not repaid during the year.

b.

Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Opening Balance	$      66.00	$      20.00	$      20.00	$      42.01
Cash Inflow
Sales	$      52.50	$      62.50	$      72.50	$      87.50
Accounts Receivable received	$      47.00	$      52.50	$      62.50	$      72.50
Interest Received @2%	$            -	$        1.60	$        1.60	$        1.60
Total Cash Inflow	$      99.50	$    116.60	$    136.60	$    161.60
Cash Outflow
Purchases	$      33.75	$      39.15	$      47.25	$      32.40
Accounts Payable paid	$            -	$      22.50	$      26.10	$      31.50
Wages Taxes and Other Expenses	$      21.00	$      25.00	$      29.00	$      35.00
Interest and Dividends	$      11.00	$      11.00	$      11.00	$      11.00
Capital Outlay	$            -	$      60.00	$            -	$            -
Interest Paid on Borrowings @3%	$            -	$            -	$        1.23	$        1.23
Total Cash Outflow	$      65.75	$    157.65	$    114.58	$    111.13
Balance	$      99.75	$    -21.06	$      42.01	$      92.48
Borrowing to maintain minimum balance		$      41.06
Deposited in Bank	$      79.75
Closing Balance	$      20.00	$      20.00	$      42.01	$      92.48

Notes for a &b

Calculation of perday sales

	Q1	Q2	Q3	Q4
Sales	$ 105.00	$ 125.00	$ 145.00	$ 175.00
Per day Sales Sales/90days	$     1.17	$     1.39	$     1.61	$     1.94
Purchases	$   56.25	$   65.25	$   78.75	$   54.00
Per day Purchases Purchasess/90days	$     0.63	$     0.73	$  &n ekkarill92 Next > < Previous Related Solutions Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 190 $ 210 $ 230 $ 260 Sales for the first quarter of the year after this one are projected at $205 million. Accounts receivable at the beginning of the year were $81 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecast sales, and suppliers... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 145 $ 165 $ 185 $ 215    Sales for the first quarter of the year after this one are projected at $160 million. Accounts receivable at the beginning of the year were $63 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecasted sales, and... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 180 $ 200 $ 220 $ 250 Sales for the first quarter of the year after this one are projected at $195 million. Accounts receivable at the beginning of the year were $77 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecasted sales, and suppliers... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 175 $ 195 $ 215 $ 245 Sales for the first quarter of the year after this one are projected at $190 million. Accounts receivable at the beginning of the year were $75 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecast sales, and suppliers... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 170 $ 190 $ 210 $ 240    Sales for the first quarter of the year after this one are projected at $185 million. Accounts receivable at the beginning of the year were $73 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecasted sales, and... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 100 $ 120 $ 140 $ 170 Sales for the first quarter of the year after this one are projected at $115 million. Accounts receivable at the beginning of the year were $45 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 40 percent of the next quarter’s forecast sales, and suppliers... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 170 $ 185 $ 200 $ 225 Sales for the first quarter of the year after this one are projected at $180 million. Accounts receivable at the beginning of the year were $71 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecast sales, and suppliers... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 145 $ 165 $ 185 $ 215 Sales for the first quarter of the following year are projected at $160 million. Accounts receivable at the beginning of the year were $63 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecast sales, and suppliers are normally... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 125 $ 145 $ 165 $ 195    Sales for the first quarter of the year after this one are projected at $140 million. Accounts receivable at the beginning of the year were $55 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 45 percent of the next quarter’s forecasted sales, and... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2... Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:   Q1   Q2   Q3   Q4   Sales $ 190 $ 210 $ 230 $ 260 Sales for the first quarter of the year after this one are projected at $205 million. Accounts receivable at the beginning of the year were $81 million. Wildcat has a 45-day collection period. Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecast sales, and suppliers... ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions JAVASCRIPT: Please create an array of student names and another array of student grades. - Create... Topic - Construction: Structural, loads, tension 1.) Explain why pure tension members are the most efficient... Procter and Gamble​ (PG) paid an annual dividend of $ 1.62$1.62 in 2009. You expect PG... locate a recent case of online child pornography. Write a summary of the incident and describe... #Python 5. Write function called evaluate() that evaluates the following Python expressions or assignments as specified:... Suggest journal, research paper link reference. i need this as reference for writing a research with... Cryptography is used heavily in internet communications. True or false? Explain ADVERTISEMENT About @ 2020 WizEdu