Paymore Products places orders for goods equal to 75% of its sales forecast in the next...

   

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Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. First $ 420 Sources of cash Cash at start of period Net cash inflow Cash at end of period Quarter in Coming Year Second $ 342 Third $ 346 Sales forecast Paymore's labor and administrative expenses are $75 per quarter and interest on long-term debt is $50 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $346. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. Minimum operating cash balance Cumulative financing required Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign. First 0 Quarter Fourth $ 394 Second 0 Following Year First Quarter $ 394 Third 0 Fourth 0 Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. First $ 420 Sources of cash Cash at start of period Net cash inflow Cash at end of period Quarter in Coming Year Second $ 342 Third $ 346 Sales forecast Paymore's labor and administrative expenses are $75 per quarter and interest on long-term debt is $50 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $346. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. Minimum operating cash balance Cumulative financing required Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign. First 0 Quarter Fourth $ 394 Second 0 Following Year First Quarter $ 394 Third 0 Fourth 0

Answer rating: 100% (QA)

Quarter Sources of cash Cash at start of period Cash at end of period Minimum operating cash balance First Sales Forecast 420 75 orders 315 Labor Admi... View the full answer