statmnts (1) - There are three steps to using this...

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Page 1 There are three steps to using this spreadsheet: (1) Make assumptions about operations in the Operations worksheet. (2) Make assumptions about financing in the Financing worksheet. (3) Use the Solver in the Financing worksheet to minimize bank notes payable subject to maintaining the minimum cash balance required. This step is explained in the Financing worksheet. The only cells that should be changed are in the Operations Assumptions and Financing Assumptions sections. The spreadsheet will generate income statements, balance sheets, and statements of cash flows. Kerry Back John M. Olin School of Business 13-Jan-97
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Page 2 OPERATIONS AND INVESTMENTS ASSUMPTIONS Year 0 1 2 3 4 Sales 400 600 800 900 COGS (% of sales) 50% 50% 50% 50% 30% 30% 30% Income tax rate 40% 40% 40% Inventory (% of COGS) 10% 10% 10% 10% Minimum cash balance (% of sales) 4% 4% 4% 4% Accounts receivable (% of sales) 12% 12% 12% 12% Accounts payable (% of COGS) 8% 8% 8% 8% 400 100 100 100 Depreciation - 100 100 100 OPERATIONS AND INVESTMENTS CALCULATIONS Year 0 1 2 3 Average sales 200 500 700 850 Average COGS 100 250 350 425 Inventory 10 25 35 42.5 Minimum cash balance
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This note was uploaded on 06/28/2010 for the course MKTG 00HP01 taught by Professor Himanshu during the Spring '10 term at Indiana Institute of Technology.

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statmnts (1) - There are three steps to using this...

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