Cash budgetlong dashAdvanced The actual sales and purchases for Xenocore, Inc., for September and October 2019, along with its forecast sales and purchases for the period November 2019 through April 2020, (follow DATA below )... The firm makes 16 % of all sales for cash and collects on 42 % of its sales in each of the 2 months following the sale. Other cash inflows are expected to be $ 12, 000 in September and April, $ 13 comma 000 in January and March, and $ 28,000 in February. The firm pays cash for 11 % of its purchases. It pays for 53 % of its purchases in the following month and for 36% of its purchases 2 months later. Wages and salaries amount to 19 % of the preceding month's sales. Rent of $ 18 comma 000 per month must be paid. Interest payments of $ 11 comma 000 are due in January and April. A principal payment of $ 27,000 is also due in April. The firm expects to pay cash dividends of $ 21,000 in January and April. Taxes of $ 82 comma 000 are due in April. The firm also intends to make a $ 26,000 cash purchase of fixed assets in December. a. Assuming that the firm has a cash balance of $ 22,000 at the beginning of November, determine the end-of-month cash balances for each month, November through April. b. Assuming that the firm wishes to maintain a $ 16, 000 minimum cash balance, determine the required total financing or excess cash balance for each month, November through April. c. If the firm were requesting a line of credit to cover needed financing for the period November to April, how large would this line have to be? Explain your answer. Here is the (follow DATA below): Year Month Sales Purchases 2019 September $206, 000 $120,000 2019 October 247,000 147,000 2019 November 168,000 141,000 2019 December 158,000 99, 000 2020 January 138,000 80,000 2020 February 179,000 112,000 2020 March 199,000 102,000 2020 April 247, 000 94,000
Cash budgetlong dashAdvanced The actual sales and purchases for Xenocore, Inc., for September and October 2019, along with its forecast sales and purchases for the period November 2019 through April 2020, (follow DATA below )... The firm makes 16 % of all sales for cash and collects on 42 % of its sales in each of the 2 months following the sale. Other cash inflows are expected to be $ 12, 000 in September and April, $ 13 comma 000 in January and March, and $ 28,000 in February. The firm pays cash for 11 % of its purchases. It pays for 53 % of its purchases in the following month and for 36% of its purchases 2 months later. Wages and salaries amount to 19 % of the preceding month's sales. Rent of $ 18 comma 000 per month must be paid. Interest payments of $ 11 comma 000 are due in January and April. A principal payment of $ 27,000 is also due in April. The firm expects to pay cash dividends of $ 21,000 in January and April. Taxes of $ 82 comma 000 are due in April. The firm also intends to make a $ 26,000 cash purchase of fixed assets in December. a. Assuming that the firm has a cash balance of $ 22,000 at the beginning of November, determine the end-of-month cash balances for each month, November through April. b. Assuming that the firm wishes to maintain a $ 16, 000 minimum cash balance, determine the required total financing or excess cash balance for each month, November through April. c. If the firm were requesting a line of credit to cover needed financing for the period November to April, how large would this line have to be? Explain your answer. Here is the (follow DATA below): Year Month Sales Purchases 2019 September $206, 000 $120,000 2019 October 247,000 147,000 2019 November 168,000 141,000 2019 December 158,000 99, 000 2020 January 138,000 80,000 2020 February 179,000 112,000 2020 March 199,000 102,000 2020 April 247, 000 94,000
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
Related questions
Question
Transcribed Image Text:Cash budgetlong dashAdvanced The actual sales and purchases for Xenocore, Inc., for September and October
2019, along with its forecast sales and purchases for the period November 2019 through April 2020, (follow DATA below
)... The firm makes 16 % of all sales for cash and collects on 42 % of its sales in each of the 2 months following the sale.
Other cash inflows are expected to be $ 12, 000 in September and April, $ 13 comma 000 in January and March, and $
28,000 in February. The firm pays cash for 11 % of its purchases. It pays for 53 % of its purchases in the following month
and for 36% of its purchases 2 months later. Wages and salaries amount to 19 % of the preceding month's sales. Rent of
$ 18 comma 000 per month must be paid. Interest payments of $ 11 comma 000 are due in January and April. A
principal payment of $ 27,000 is also due in April. The firm expects to pay cash dividends of $ 21,000 in January and
April. Taxes of $ 82 comma 000 are due in April. The firm also intends to make a $ 26,000 cash purchase of fixed assets
in December. a. Assuming that the firm has a cash balance of $ 22,000 at the beginning of November, determine the
end-of-month cash balances for each month, November through April. b. Assuming that the firm wishes to maintain a
$ 16, 000 minimum cash balance, determine the required total financing or excess cash balance for each month,
November through April. c. If the firm were requesting a line of credit to cover needed financing for the period
November to April, how large would this line have to be? Explain your answer. Here is the (follow DATA below): Year
Month Sales Purchases 2019 September $206, 000 $120,000 2019 October 247,000 147,000 2019 November
168,000 141,000 2019 December 158,000 99, 000 2020 January 138,000 80,000 2020 February 179,000 112,000 2020
March 199,000 102,000 2020 April 247, 000 94,000
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