financial budget using sensitivity analysis

Project Description:

lipman auto parts, a family-owned auto parts store, began january with $10,300 cash. management forecasts that collections from credit customers will be $11,400 in january and $14,800 in february. the store is scheduled to receive $5,000 cash on a business note receivable in january. projected cash payments include materials pur- chases ($3,000 in january and $3,600 in february), direct labor ($7,000 monthly) and manufacturing overhead ($2,500 in january and $2,800 in february). selling and administrative expenses are ($2,700 each month).
lipman auto parts’ bank requires a $10,000 minimum balance in the store’s checking account. at the end of any month when the account balance dips below $10,000, the bank automatically extends credit to the store in multiples of $1,000. lipman auto parts borrows as little as possible and pays back loans in quarterly installments of $2,000, plus 4% annual interest on the entire unpaid principal. the first loan payment occurs three months after the initial loan.
requirements
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1. prepare lipman auto parts’ cash budget for january and february. 2. how much cash will lipman auto parts borrow, if any, in february if collections
from customers that month total $13,800 instead of $14,800?
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