Jane McDonald, a financial analyst at XYZ Company, has prepared the following sales and cash out forecasts
Question:
Jane McDonald, a financial analyst at XYZ Company, has prepared the following sales and cash out forecasts for the January-June 2013 period. He states that historically, 30% of sales were cash, credit sales, and 70% were collected in a month. after the sale, the remaining 30% is collected two months after the sale. The Firm wishes to maintain a minimum ending balance of $25 in its cash account. The balances above the amount will be invested in short-term government securities, and the deficit will be financed by short-term bank borrowing. The initial cash balance on April 1 is $115.
Oh | Sales | Cash payment |
February | $500 dollars | 400 dollars |
Mart | 600 dollars | $ 300 |
Nisan | 400 dollars | 600 dollars |
May | $200 dollars | $500 dollars |
June | $200 dollars | $200 dollars |
Prepare a cash budget for April, May and June
How much funding, if any, will XYZ need to meet its obligations during this quarter?
Expert Answer:
