Silver Corporation is interested in making sure it has enough money to finance its assets. The company's total assets for the months of January through December are given in the following table Month Total assets ($) January $130,000 February 128,000 March 125,000 April 117,000 May 110,000 June 111,000 July 110,000 August 107,000 September 108,000 October 103,000 November 110,000 December 120,000 a. Find the average monthly seasonal and permanent funds requirement. b. What is the total cost of financing under the aggressive and conservative strategies? Assume short-term funds costs 4.5 percent and the interest rate for long-term funds is 12 percent.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Silver Corporation is interested in making sure it has enough money to finance its assets. The company's total assets for the months of January through December are given in the following table
Month Total assets ($)
January $130,000
February 128,000
March 125,000
April 117,000
May 110,000
June 111,000
July 110,000
August 107,000
September 108,000
October 103,000
November 110,000
December 120,000
a. Find the average monthly seasonal and permanent funds requirement.
b. What is the total cost of financing under the aggressive and conservative strategies? Assume short-term funds costs 4.5 percent and the interest rate for long-term funds is 12 percent.
c. If the firm can earn 4% on the investment of any surplus balances how total cost of each of the strategies differ from costs calculated in part b.
Step by step
Solved in 3 steps
