Using the information provided in problem 14, construct cash budgets from each of the following scenarios. Use

Question:

Using the information provided in problem 14, construct cash budgets from each of the following scenarios. Use the data from problem 14 as the “base case.” What insights do we obtain from a scenario analysis?
a. Best case: sales are 10-percent higher than the base; purchases are 5-percent lower than the base; cash sales are 30 percent of sales.
b. Worst case: sales are 10-percent lower than the base; purchases are 5-percent higher than the base; cash sales are 15 percent of sales.
Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment. Its primary purpose is to provide the...