Exercise_4 - planned to be invested in July for $200,000....

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Cash budget 40% of sales are cash sales. For the credit sales, 75% is expected to be collected next month and another 25% is expected to be collected next two months. The inventory purchase is 50% of next month sales. The payment of purchase will be made 60% in next month and 40% in next two months Wages expense is 20% of sales. Lease payment is $10,000 per month. Interest payment is $30,000 and will be paid in June and September. Cash dividend is paid in June for $50,000. Tax payment is $25,000 at the end of each quarter. Capital outlay is
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Unformatted text preview: planned to be invested in July for $200,000. Minimum cash balance is $15,000 and maximum cash balance is $40,000. The borrowing rate is 8% and investing rate is 6% The ending cash balance in May is $20,000 Use the above information to develop the cash budget for June - September Compute the minimum required credit line Use the scenario analysis to show the required credit line if the company can choose for capital outlay in any month between June to September...
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This note was uploaded on 01/11/2012 for the course FINANCE fin 3701 taught by Professor Tengihla during the Spring '11 term at Assumption College.

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