The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget...

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The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments: Collections Payments Month Cash Sales $10,000 $12,000 $14,000 $16,000 $20,000 Credit Sales Purchases Wages Miscellaneous Expenses $6000 $1,500 $2,000 $2,500 $3,000 $4,000 $4,500 July $20,000 $24,000 $28,000 August September October November $32,000 $40,000 December $25,000 $50,000 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. $15,000 $18,000 $7.200 $21,000 $8,400 $24,000 $9,600 $30,000 $12,000 $37,500 $15,000 b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%. c) Determine the impact on the ending cash balance if the firm uses any cash surplus above the required minimum cash balance to pay off its short-term borrowing monthly. The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments: Collections Payments Month Cash Sales $10,000 $12,000 $14,000 $16,000 $20,000 Credit Sales Purchases Wages Miscellaneous Expenses $6000 $1,500 $2,000 $2,500 $3,000 $4,000 $4,500 July $20,000 $24,000 $28,000 August September October November $32,000 $40,000 December $25,000 $50,000 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. $15,000 $18,000 $7.200 $21,000 $8,400 $24,000 $9,600 $30,000 $12,000 $37,500 $15,000 b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%. c) Determine the impact on the ending cash balance if the firm uses any cash surplus above the required minimum cash balance to pay off its short-term borrowing monthly.

Answer rating: 100% (QA)

a To determine the firms forecasted monthly cash balance well start with the ending cash balance as of June 30 2017 which is 10000 and then add or sub... View the full answer