Construct a short-term financial plan for Springfield Snowboards based on its expansion opportunity described in the "Positive Cash Flow Shocks" part of Section 20.1. Base the plan on the following table which forecasts additional capital expenditures, marketing (SG&A), and working capital in Q1 and Q2 along with higher sales in Q2Q4. Assume that Springfield ends 2021 with $1.06 million in cash and that its bank will offer it a short-term loan at the rate 3.00% per quarter. Assume that the minimum cash balance to be maintained is $495,000.

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Part 1

Complete the cash budget based on the assumptions of the problem.(Round to the nearest integer.)

Cash Balance and Short-Term Financing ($000) 2022Q1Starting Cash Balance$ Change in Cash and Equivalents$ Minimum Cash Balance$ Surplus (Deficit) Relative to Minimum$ Increase (Decrease) in Short-Term Financing$ Existing Short-term Financing$ Total Short-term Financing$ Ending Cash Balance$ 2022Q2$ $ $ $ $ $ $ $ 2022Q3$ $ $ $ $ $ $ $ 2022Q4$ $ $ $ $ $ $ $

Part 2

(Select the best choice below.)

A. They will need to borrow $360,000 for the second quarter of 2022, and they will pay back the loan during Q3 of 2022.

B. They will need to borrow $360,000 for the first quarter of 2022, and they will pay back the loan during Q2 of 2022.

C. They will need to borrow $360,000 for the first quarter of 2022, and they will pay back the loan during Q4 of 2022.

D. They will need to borrow $360,000 for the third quarter of 2022, and they will pay back the loan during Q4 of 2022.

Quarter2021Q42022Q12022Q22022Q32022Q4Income Statement ($000) Sales109135000610061506100Cost of Goods Sold70933250396539983965Selling ,Gen., and Admin.1123900600500600EBITDA2697850153516521652Depreciation459600600450550EBIT223825093512021102Taxes78388327421386Net Income1455162608781716Statement of Cash Flow Net Income1455162608781716Depreciation 600600450550Changes in Working Capital: Accounts Receivable -140-30000Inventory Accounts Payable 5310500Cash from Operating Act. 675101312311266Capital Expenditures -1600-535-515-535Other Investments 0000Cash from Investing Act. -1600-535-515-535Net Borrowing 0000Dividends 0000Capital Contributions 0000Cash from Financing Act. 0000Change in Cash Equiv. -925478716731