Wildcat, Inc., has estimated sales (in millions) for the next four quarters as f
ID: 2742644 • Letter: W
Question
Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:
Sales for the first quarter of the year after this one are projected at $190 million. Accounts receivable at the beginning of the year were $75 million. Wildcat has a 45-day collection period.
Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecasted sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $11 million per quarter.
Wildcat plans a major capital outlay in the second quarter of $98 million. Finally, the company started the year with a $80 million cash balance and wishes to maintain a $40 million minimum balance.
Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)
What is the net cash cost for the year under this target cash balance? (Negative amount should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)
Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)
What is the net cash cost for the year under this target cash balance? (Negative amount should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)
Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:
Explanation / Answer
As question is lengthy you need to use the above things as presented then proceed with the question normally you will be able to solve after this, as question says that for the quarter you will have have to take days as 90 days that's all and interest will similarly, be 3/12 or 4 month basis.
Q1 Q2 Q3 Q4 Sales $ 175 $ 195 $ 215 $ 245 830 Account recievables no. of days in quarter/collection period Cash flow Sales for the first quarter of the year after this one are projected at $190 million. Accounts receivable at the beginning of the year were $75 million. Wildcat has a 45-day collection period. 75 2 150 Credit sales Cash sales 40 8 Purchases Accounts payable in the quarter paid Wages,Taxes and other expenses Interest and dividend Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecasted sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $11 million per quarter. 95 38 38 11 Capital outlay Wildcat plans a major capital outlay in the second quarter of $98 million. Finally, the company started the year with a $80 million cash balance and wishes to maintain a $40 million minimum balance. 98 a-1. Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) WILDCAT, INC. Short-Term Financial Plan (in millions) Q1 Q2 Q3 Q4 Beginning cash balance $40.00 $40.00 $40.00 $40.00 Net cash inflow $8.00 $8.00 $8.00 $8.00 New short-term investments 0 -98 Income from short-term investments 0 Short-term investments sold 0 New short-term borrowing 0 0.03 -0.2097 -0.032097 Interest on short-term borrowing 11 11 11 11 Short-term borrowing repaid 0 Ending cash balance $37.00 ($60.97) $36.79 $36.97 Minimum cash balance 40 40 40 40 Cumulative surplus (deficit) ($3.00) ($20.97) ($3.21) ($3.03) Beginning short-term investments ($3.00) ($20.97) ($3.21) $3.03 Ending short-term investments $ $ $ $ Beginning short-term debt $ $ $ $ Ending short-term debt $ $ $ $ a-2. What is the net cash cost for the year under this target cash balance? (Negative amount should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Net cash cost $ b-1. Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) WILDCAT, INC. Short-Term Financial Plan (in millions) Q1 Q2 Q3 Q4 Beginning cash balance $20.00 $20.00 $20.00 $20.00 Net cash inflow New short-term investments Income from short-term investments Short-term investments sold New short-term borrowing Interest on short-term borrowing Short-term borrowing repaid Ending cash balance $ $ $ $ Minimum cash balance Cumulative surplus (deficit) $ $ $ $ Beginning short-term investments $ $ $ $ Ending short-term investments $ $ $ $ Beginning short-term debt $ $ $ $ Ending short-term debt $ $ $ $ b-2. What is the net cash cost for the year under this target cash balance? (Negative amount should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Net cash cost $Related Questions
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