Question: Work out a short-term financing plan for Dynamic Mattress Company, assuming the limit on the line of credit is raised from $38 to $50 million.

Work out a short-term financing plan for Dynamic Mattress Company, assuming the limit on the line of credit is raised from $38 to $50 million. Otherwise keep to the assumptions used in developing Table 30.9.

Fourth First Quarter Second Quarter Third Quarter Quarter New borrowing: 1. Bank

Fourth First Quarter Second Quarter Third Quarter Quarter New borrowing: 1. Bank loan 38.0 0.0 19.7 19.7 0.0 0.0 2. Stretching payables 3. Total 0.0 0.0 3.5 0.0 41.5 0.0 Repayments: 4. Bank loan 0.0 0.0 4.3 33.7 5. Stretching payables 6. Total 0.0 3.5 19.7 0.0 0.0 3.5 24.0 33.7 7. Net new borrowing 16.2 -24.0 41.5 -33.7 8. Plus securities sold 9. Less securities bought 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 10. Total cash raised -24.0 46.5 16.2 -34.1 Interest payments* 11. Bank loan 0.0 1.0 0.8 1.0 12. Stretching payables 13. Interest on securities sold* 14. Net interest paid 15. Cash required for operations* 16. Total cash required 0.0 0.2 1.0 0.0 0.0 0.1 0.1 0.1 0.0 1.2 2.0 0.9 46.5 15.0 -26.0 -35.0 -24.0 -34.1 46.5 16.2

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