Suppose that Linksys is considering the development of a wireless home networkin

Question

Suppose that Linksys is considering the development of a wireless home networking appliance, called HomeNet, that will provide both the hardware and the software necessary to run an entire home from any Internet connection Linksys's receivables are 156% of sales and its payables are 15.7%?COGS Forecast the required investment in net working capital for HomeNet assuming that sales and cost of goods sold (COGS) will be as follows: Year Sales COGS $23,742 $26,400 $10,672 $23,608 $9,544 $8,658 $3,500 $9,598 The required investment in net working capital for year O is $O (Round to the nearest dolar) The required investment in net working capital for year 1 is SRound to the nearest dollar.) The required investment in net working capital for year 2 is $LI. (Round to the nearest dollar.) The required investment in net working capital for year 3 is $ (Round to the nearest dolar.) The required investment in net working capital for year 4 is S(Round to the nearest dollar)

Explanation / Answer

Statement showing Receivable and payable

Statement showing NW requirement

Particulars 0 1 2 3 4 Sales 23742 26400 23608 8658 Receivables(15.6%) 3703.752 4118.4 3682.848 1350.648 COGS 9598 10672 9544 3500 Payables(15.7%) 1506.886 1675.504 1498.408 549.5

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