Current Asset Management Solutions 3

Current Asset Management Solutions 3 - * B. $105 C. $110 D....

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Old Exam Questions - Current Asset Management - Solutions Page 3 of 21 Pages Monthly expenses include salaries-$10; lease-$5; depreciaiton-$5, miscellaneous- $5; and a tax payment of $75 in December. Purchases and wages are equal to 50 percent of the current month's sales, but are paid for in the month after they are incurred. Starting cash balances at the beginning of October are $50. The firm desires to maintain a minimum cash balance of $100. How much excess cash (or loans) will the firm have at the end of November? A. $100
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: * B. $105 C. $110 D. $115 E. $120 Cash Budget Actual Forecasted August September October November December Sales 100 200 300 300 200 Collections Month 0 - 10% 10 20 30 30 20 Month 1 - 65% 65 130 195 195 Month 2 - 20% 20 40 60 Total 180 265 275 P&W 50 100 150 150 100 P&W Lagged 50 100 150 150 Salaries 10 10 10 10 10 Lease 5 5 5 5 5 Depreciation 0 Miscellaneous 5 5 5 5 5 Taxes Paid 50 0 75 Total 120 170 245 Gain (Loss) 60 95 30 Cash at Start 50 110 205 Cumulative 110 205 235 Desired -100-100 -100 Excess 10 105 135 Loans...
View Full Document

This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

Ask a homework question - tutors are online