Question: QUESTIONS: 1. Use the information to develop a cash flow analysis in the table above 2. Why do the net cash flows for April and

QUESTIONS: 1. Use the information to develop a

QUESTIONS:

1. Use the information to develop a cash flow analysis in the table above

2. Why do the net cash flows for April and May look so much better than those for the other months? What are the consequences for building up and draining down inventories under a level production plan?

Part a.) CASH INFLOWS CASH OUTFLOW NET FLOW CUMULATIV E NET FLOW MONTH January February March April | May June SALES REGULAR OVERTIME ENDING FORECAS PRODUCTIO PRODUCTIO INVENTORY 0 800 1150 0 350 1000 1150 0 500 1200 1150 0 450 1400 1150 0 200 1600 1150 150 0 1500 1150 350 0 Information: Price per cabinet: Regular production cost Overtime production cost Monthly inventory holding cost: $500 $350 $450 $10

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