Question 25, P1-3 (similar to)Part 1 of 5Cash flows It is typical for Jane to plan, monitor, and assess her financial position using cash flows over a given period, typically a month. Jane has a savings account and her bank loans money at 6% per year while it offers short-term investment rates of 5%. Jane's cash flows during August were as follows:a. Determine Jane's total cash inflows and cash outflows.b. Determine the net cash flow for the month of August.c. If there is a shortage, what are a few options open to Jane?d. If there is a surplus, what would be a prudent strategy for her to follow?--.a. Jane's total cash inflows are $(Round to the nearest dollar.)Data table(Click the icon here a in order to copy the contents of the data table below into aspreadsheet.)ItemCash inflowCash outflowClothes$1,200Interest received$440$480$810Dining outGroceriesSalaryAuto payment$4,600$356$290$1,240$226UtilitiesMortgageGasPrintDone

Here, Bank Loan Rate is 6% Short Term Investment Rate is 5% Other Details regarding cash flows are…

Answered: Cash flows It is typical for Jane to…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You must type in both the answer and all of your work to receive credit. Use the financial statements and additional data provided by management to calculate the firm's Free Cash Flow for the projected year. • Tax rate = 25% • Plans for the projected year will require $500 of new machinery and equipment • Firm expects next year's dividend to be $260 Acme Products, Inc. Balance Sheets ASSETS Cash Receivables Inventory Property, plant & equipment Total assets LIABILITIES & EQUITY Accounts payables Accrued expenses Long-term debt Common stock Paid-in Capital Retained earnings Total liabilities and equity current yr 400 600 900 2,200 4,100 500 400 1,400 600 200 1,000 4,100 projected yr 500 750 1,125 2,750 Acme Products, Inc. Income Statement Operating expenses 5,125 Depreciation 5,125 Sales (all credit) Cost of Goods Sold Gross Profit Operating income Interest expense 625 Taxable income 500 Taxes (25%) 1,750 Net income 750 250 1,250 projected yr 7,000 4,000 3,000 1,400 400 1,200 100 1,100…
Aaron Heath is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training services company that will offer tutorial services over the Internet. Aaron expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the Internet assistance. Thereafter, he expects demand to stabilize. The following table presents the expected cash flows: Year of Operation Cash Inflow Cash Outflow Year 1 $ 14,300 $ 8,700 Year 2 18,800 11,500 Year 3 22,100 13,400 Year 4 22,100 13,400 In addition to these cash flows, Aaron expects to pay $20,100 for the equipment. He also expects to pay $3,600 for a major overhaul and updating of the equipment at the end of the second year of operation. The equipment is expected to have a $1,800 salvage value and a four-year useful life. Aaron desires to earn a rate of…
Cash flow of accounts receivable. Myers and Associates, a famous law firm in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the secondmonth, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills. Myers wants to know the anticipated cash flow for the first quarter of 2015 if the past billings and anticipated billings follow this same pattern. The actual and anticipated billings are as follows: Fourth Quarter Actual Billings First Quarter Anticipated Billings Oct. Nov. Dec. Jan. Feb. Mar. $316,000 $253,000 $235,000 $266,000 $288,000 $315,000 What is the anticipated cash flow for January of 2015 if past billings and anticipated billings follow this same pattern? (Round to the nearest dollar.)
A financial adviser is reviewing one of her client's accounts. The client has been investing $1,000 at the end of every quarter for the past Il years in a fund that has averaged 7.3% compounded quarterly. How much money does the client have in his account? Construct a cash flow diagram and use a formula.
What is the net cash flow per month under the following circumstances? Part-time job earnings $600 per month College fund from grandparents of $400 per month Scholarship of $5000 per year Rent $450 per month Groceries of $50 per month Tuition and fees $3000 twice per year Misc. of $100 per month
The New Fund had average daily assets of $2.7 billion in the past year. New Fund's expense ratio was 1.6%, and its management fee was 1.4%. * Required: a. What were the total fees paid to the fund's investment managers during the year? (Enter your answer in millions rounded to 2 decimal places.) Total fees paid million b. What were the other administrative expenses? (Enter your answer in millions rounded to 2 decimal places.) Other administrative expenses million
Given the following information about cash management of the Evergreen Company: Average cash payment is $120,000 per month. The company invests spare cash in Treasury Bills at an annual interest rate of 3.90%. The cost of each transaction of Treasury bills is $25. What is the average cash balance of the Evergreen Company? (no excel pls) a. $21,483 b. $12,403 c. $8,771 d. $15,191 e. $42,967
To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) Could you please help me answer 7-9?
A company collected $100,000 cash from a customer who both received and was billed for the goods last quarter. Which of the following items would be increased by this cash collection transaction? (check all that apply) Cash from Operations Accounts Receivable Current Assets Cash Revenue
You are looking for a bank in which to open a checking account for your new part-time business. You estimate that in the first year, you will be writing 30 checks per month and will make three debit transactions per month. Your average daily balance is estimated to be $900 for the first six months and $2,400 for the next six months. Use the following information to solve the problem. Bank Monthly Fees and Conditions Bank 1 $16.00 with $1,000 min. daily balance-or-$25.00 under $1,000 min. daily balance Bank 2 $4.50 plus $0.40 per check over 10 checks monthly$1.00 per debit transaction Bank 3 $5 plus $0.25 per check$2.00 per debit transaction Bank 4 $8 plus $0.15 per check$1.50 per debit transaction (a) Calculate the cost (in $) of doing business with each bank for a year. Bank 1 Bank 2 Bank 3 Bank 4 (b) Which bank should you choose for your checking account? Bank 1 Bank 2 Bank 3 Bank 4
4. Financial Forecast & Feedback As the manager of A & R Entertainment, you are required to complete the cash flow forecast and provide a feedback to the director. Your cash flow forecast will predict the bank balance at the end of each month for every month of the year. Use the information below to complete this task. a. A & R Entertainment has on its books four (4) major events to run, which will take place in March, May, August, and October. b. The total of $2,850,000.00 in ticket sales will be earned in the months that the events are held. The March event will earn $650,000.00, and the other events in May, August, and October, will earn $700,000, $850,000, and $650,000.00 respectively. c. Expenditure on casual salaries, travel and transport, and venue hire, will occur only in the months in which the four events take place. These expenditures will be the same for each event. d. Salaries and office and administration expenses will occur evenly every month. The company's opening bank…
Jim Hayes wants to buy some electronic equipment for $800. Jim has decided to save uniformamount at the end of each month so that after 12 months he will have the required $800. If theinterest rate is 0.5% per month (a) Construct a cash flow diagram (b) determine how much Jim has to deposit each month by using tabulated factors

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