Blake and Anna Carlson are preparing a plan to submit to venture capitalists to fund their business. Music Masters. The company plans to spend 380,000 on equipment in the first quarter of 20X7. Salaries and other operating expenses (paid as incurred) will be 35,000 per month beginning in Jan 20X7 and will continue at that level thereafter. The company will receive its first revenues in Jan. 20X8, with cash collections averaging 30,000 per month for all of 20X8/ In Jan 20X9 cash collections are expected to increase to 100,000 per month and continue at that level thereafter.

Assume that the company needs enough funding to cover all its cash needs until cash receipts start exceeding cash disbursments.

Please finish the table below and answer the couple of questions.

1. Based on its stated ovjective of stopping venture capital funding when cash receipts begin to exceed cash disbursments, in what month/year should Music Masters no longer require venture capital funding? Why?

2. What is the total amount of expeniditures Music Masters will incur before its cash receipts begin to exceed its cash disbursments? What is the total amount of venture capital funding that Music Masters should request?

3. Is the amount of venture capital funding that Music Masters should request equal to its total expenditures? If not, why are the amounts different?

	20Y7	20X8	20X9	20Y0	Total
Equipment Purchase	380000
Salaries and Other Operating Expenses	420000	420000	420000	420000	1680000
Revenues		360000	1200000
Net Cash Requirements