Monthly cash budget for the three months

Assignment Help Corporate Finance
Reference no: EM13328590

In-tech Corporation s sales and purchases for the last three months are as following:

Sales ($) Purchases ($)
October 100,000 80,000
November 90,000 100,000
December 120,000 75,000

For the next three months, it estimates sales and purchases to be as following:

Sales ($) Purchases ($)
January 90,000 70,000
February 80,000 70,000
March 80,000 70,000

It pays 40 percent of purchases in cash and gets a 4 percent discount. Another 40 percent of purchases are paid the next month, and the final 20 percent of purchases are paid in the second month after the purchase (for example, 40 percent of October purchases are paid in October, 40 percent October purchases are paid in November, and 20 percent October purchases are paid in December). Half of the sales are made in cash, and the balance is collected the next month. Cash sales are given a two percent discount, and five percent of credit sales end up as bad debt. The monthly operating expenses for In-tech Corporation s are $10,000. In-tech expects to sell one of its machinery in March for $25,000. It will buy the replacement in April for $50,000. The cash balance as on December 31 was $50,000. In-tech has a target cash balance of $50,000. Prepare a monthly cash budget for the next three months.

Reference no: EM13328590

Questions Cloud

What is the annual yield according to the discount method : A six-month $10,000 Treasury bill is selling for $9,844. What is the annual yield according to the discount method. Does this yield understate or overstate the true annual yield
Explain 3-methyl-2-butanone : 3-methylbut-1-ene ---->3-methyl-2-butanone. For the reagents I put, HBr, Tert butoxide, O3 and dms. I was wondering about the O3 and dms, im not sure if that part is right.
Describe actions in moral terms even when birds are acting : Bird and Waters argue that middle managers are reluctant to describe their actions in moral terms even when they are acting for moral reasons. Does their account of middle manager behavior match your experience.
Determine the net force acting on the ball : A ball is suspended by a string and moves in a horizontal circle. One such pendulum has a 100g ball at the end of a 1.5 meter long string and has an orbit of radius 30.0cm. Determine the net force acting on the ball and the acceleration
Monthly cash budget for the three months : In-tech expects to sell one of its machinery in March for $25,000. It will buy the replacement in April for $50,000. The cash balance as on December 31 was $50,000. In-tech has a target cash balance of $50,000. Prepare a monthly cash budget for th..
A gas container with a fixed volume has a pressure of p atm : A gas container with a fixed volume has a pressure of p atm. Gas is then added to the container so that the number of gas particles is the container doubles. What happens inside the container
Find the magnitude of the turtles average velocity : A turtle ambles lesisurely- as turtles tend to do- when it moves from a location with position vector r1x = 1.07 m, find the magnitude of the turtle's average velocity
Explain the reaction between (r)-3-methylhexan-2-one : Draw the structure of the product(s) of the reaction between (R)-3-methylhexan-2-one and phenylmagnesium bromide, followed by acidification. Use wedge and dash bonds to indicate stereochemistry. If more than one stereoisomer is formed, draw them a..
What would be mass incs estimated cost of equity : Currently the company s cost of equity, which is based on the CAPM, is 12 percent and its tax rate is 40 percent. What would be Mass Inc's estimated cost of equity if it were to change its capital structure to 60 percent debt and 40 percent equity..

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd