Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 1, Problem 7FPE
Summary Introduction
To discuss: Impact of geographic location, age, and education on personal income.
Personal income refers to total individual’s earnings from salaries (wages), investments and other ventures. It is total sum of all incomes received by all the individuals during a specific period.
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Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows:
Q1
Q2
Q3
Sales $ 125 $ 145 $ 165
Q4
$ 195
Sales for the first quarter of the following year 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 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 $10 million per quarter.
Wildcat plans a major capital outlay in the second quarter of $81 million. Finally, the company started the year with a cash balance of
$70 million and wishes to maintain a $30 million minimum balance.
a. Complete the following cash budget for Wildcat, Incorporated.
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in
millions,…
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Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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