r Following Year First Second Third Fourth First Quarter Sales forecast $375 $320 $300 $360 $360 Paymore’s labor and administrative expenses are $66 per quarter and interest on long-term debt is $41 per quarter. Paymore’s cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $300 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $300. On average, two-thirds of purchases are paid for in th
Paymore Products places orders for goods equal to 75% of its sales
| Quarter in Coming Year | Following Year | |||||
| First | Second | Third | Fourth | First Quarter | ||
| Sales forecast | $375 | $320 | $300 | $360 | $360 | |
Paymore’s labor and administrative expenses are $66 per quarter and interest on long-term debt is $41 per quarter. Paymore’s cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $300 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $300. On average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign. Round order, payment, and collection calculations to the nearest whole number. Enter your answers in the Table in millions of dollars, rounded to 2 decimal places.)
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