5.) The cash flow forecast for the city of Typical, KY is provided on the following...

  

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5.) The cash flow forecast for the city of Typical, KY is provided on the following page. (a.) What information does a cash flow forecast provide? (b.) Based on Typical's cash flow forecast, what should a prudent finance officer do from month-to-month in order to successfully manage the city's finances? Based on the information provided, when should the city borrow and when should it invest? Cash Inflows Federal sources State sources Local sources Total Cash inflow Total Cash Outflow July Net Cash Flow Beginning Cash Balance Ending Cash Balance 350.000 300,000 Cash Outflows Personnel services costs 350,000 Contracted services Operations Facility operations/ maintenance 000,000 August 300,000 300,000 250,000 50,000 150,000 900,000 200,000 75,000 75,000 50,000 City of Typical, KY-Cash Forecasting Budget November December January February March September October Cash sale margin 100,000 Cash shortage or surplus 300,000 350,000 350,000 75,000 75,000 450.000 900,000 500,000 50,000 350,000 75,000 75,000 75,000 75,000 100,000 100,000 100,000 100,000 500,000 600,000 600,000 300,000 (550,000) (150,000) 300,000 100,000 400,000 (150,000) (100,000) 400,000 (150,000) (300,000) 600,000 100,000 100,000 (250,000) (400,000) 350,000 75,000 75,000 50,000 100,000 100,000 350,000 300,000 250,000 2,650.000 500,000 600,000 900,000 2,650,000 300,000 100,000 400,000 600,000 600,000 350,000 150,000 350,000 350,000 350,000 350,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 100,000 100,000 100,000 300,000 100,000 750,000 100,000 May 250,000 400,000 100,000 (100,000) (550,000) 300,000 2,050,000 (200,000) (660,000 (350,000) 1,700,000 1,500,000 1,150,000 (100,000) (650,000) (350,000) 1,700,000 1,500,000 1,150,000 950,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 (100,000) (200,000) (750,000) (450,000) 1,600,000 1,400,000 1,050,000 100,000 1.200,000 600,000 600,000 600,000 600,000 7,200,000 (200,000) (350,000) (200,000) (550,000) 950,000 400,000 700.000 1,800,000 50000 5,000,000 TOTAL 50,000 7,500,000 150,000 4,200,000 75,000 900,000 75,000 900.000 100,000 100,000 850,000 300,000 Note: This cash flow forecast uses what is called a "cash safe margin." This number, here $100,000, is a minimum amount of money the public entity wishes to hold for purposes of safety. 300,000 5.) The cash flow forecast for the city of Typical, KY is provided on the following page. (a.) What information does a cash flow forecast provide? (b.) Based on Typical's cash flow forecast, what should a prudent finance officer do from month-to-month in order to successfully manage the city's finances? Based on the information provided, when should the city borrow and when should it invest? Cash Inflows Federal sources State sources Local sources Total Cash inflow Total Cash Outflow July Net Cash Flow Beginning Cash Balance Ending Cash Balance 350.000 300,000 Cash Outflows Personnel services costs 350,000 Contracted services Operations Facility operations/ maintenance 000,000 August 300,000 300,000 250,000 50,000 150,000 900,000 200,000 75,000 75,000 50,000 City of Typical, KY-Cash Forecasting Budget November December January February March September October Cash sale margin 100,000 Cash shortage or surplus 300,000 350,000 350,000 75,000 75,000 450.000 900,000 500,000 50,000 350,000 75,000 75,000 75,000 75,000 100,000 100,000 100,000 100,000 500,000 600,000 600,000 300,000 (550,000) (150,000) 300,000 100,000 400,000 (150,000) (100,000) 400,000 (150,000) (300,000) 600,000 100,000 100,000 (250,000) (400,000) 350,000 75,000 75,000 50,000 100,000 100,000 350,000 300,000 250,000 2,650.000 500,000 600,000 900,000 2,650,000 300,000 100,000 400,000 600,000 600,000 350,000 150,000 350,000 350,000 350,000 350,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 100,000 100,000 100,000 300,000 100,000 750,000 100,000 May 250,000 400,000 100,000 (100,000) (550,000) 300,000 2,050,000 (200,000) (660,000 (350,000) 1,700,000 1,500,000 1,150,000 (100,000) (650,000) (350,000) 1,700,000 1,500,000 1,150,000 950,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 (100,000) (200,000) (750,000) (450,000) 1,600,000 1,400,000 1,050,000 100,000 1.200,000 600,000 600,000 600,000 600,000 7,200,000 (200,000) (350,000) (200,000) (550,000) 950,000 400,000 700.000 1,800,000 50000 5,000,000 TOTAL 50,000 7,500,000 150,000 4,200,000 75,000 900,000 75,000 900.000 100,000 100,000 850,000 300,000 Note: This cash flow forecast uses what is called a "cash safe margin." This number, here $100,000, is a minimum amount of money the public entity wishes to hold for purposes of safety. 300,000

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Based on the cash flow forecast provided for the city of Typical KY lets analyze when the city shoul... View the full answer