Cash budget, Financial Management

We need to have done some exploration work on all of the major projects for inclusion in our prospectus, but of our $4m we need at least $1m in the bank to pay for all the listing expenses and to ensure we have a reasonable amount of cash in case anything goes wrong. This means that $3m can be spent on all activities in the lead up to the listing. We therefore need a cash budget to ensure we spend appropriately what we have. 

Revenue

Our only source of revenue will be the interest on the money in the bank, so please make sure this is well invested - and safely. We will, of course, need this included in the budget.

Costs

Maintaining our Perth office, including paying the accounts clerk, costs about $15,000 per month. Directors' fees total $30,000 per year. Directors normally fly business class to and from Mali and Niger so some flights to and from should be included, as should reasonable hotel, vehicle and meal costs while there. We believe that at least 10 visits, each of at least a week, will be needed between all the directors to adequately oversee operations there.

Conditions in Wiluna will be much better, so our geologist will need to visit three times and one other director only once, also for a week each, over the period. Please include a reasonable estimate of these costs in the budget, and let us know which airline we should be using for each of these. These trips will be spaced out evenly over the next 24 months. The remainder of the money will form our exploration budget, which you do not need to divide up by purpose (that is for our geologist to do), but will start to be spent from October onwards. Keep in mind that working in the Sahara might be seasonal, so the costs are likely to be much lower when we cannot work.

Posted Date: 3/6/2013 4:53:39 AM | Location : United States







Related Discussions:- Cash budget, Assignment Help, Ask Question on Cash budget, Get Answer, Expert's Help, Cash budget Discussions

Write discussion on Cash budget
Your posts are moderated
Related Questions
We can measure the portfolio duration by calculating the weighted average of the duration of the bonds in the portfolio. The proportion of the portfolio that a se

what role do core deposits play in predicting the probability distribution of net deposit drains

As the CEO of PG Industries, you are hired at the pleasure of the Board of Directors, who in turn are elected by the shareholders. You are considering Project A which you are convi

What action(s) should be taken if analysis of pro forma financial statements reveals positive trends?  Negative trends? When examine the pro forma statements, managers habi

Question : (a) A project must have a useful purpose. Therefore, as a project is evaluated, the team should determine the requirements of the local community and industry. These

How do tax considerations affect the cost of debt and the cost of equity? For the reason that interest on debt is tax deductible to the issuing firm, the higher the tax rate th

Explain in detail various sources of finance. Which is the most appropriate one?

Karl Robinson is about to make his first major decision as president and chief executive officer of Conway Control & Instrument Corporation, a manufacturer of electronic test instr

XYZ company produces three products X,Y and Z. for the coming accounting period budgets are to be prepared based on following information. Budgeted Sales Product X       2,00

Determine the term- Component Cost and Composite Cost A company may contemplate to raise desired amount of funds by different sources comprising preferred stock, debentures and