Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters asfollows:Q1Q2Q3Q4Sales $ 110$ 130 $ 150 $ 180Sales for the first quarter of the following year are projected at $125 million. Accountsreceivable at the beginning of the year were $49 million. Wildcat has a 45-day collectionperiod.Wildcat's purchases from suppliers in a quarter are equal to 40 percent of the nextquarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, andother expenses run about 20 percent of sales. Interest and dividends are $11 million perquarter.Wildcat plans a major capital outlay in the second quarter of $78 million. Finally, thecompany started the year with a cash balance of $67 million and wishes to maintain a$30 million minimum balance.a. Complete the following cash budget for Wildcat, Incorporated. (A negativeanswer should be indicated by a minus sign. Do not round intermediatecalculations and enter your answers in millions, not dollars, rounded to 2 decimalplaces, e.g., 32.16.)WILDCAT, INCORPORATEDCash Budget(in millions)Q1Q2Q3Q4Beginning cash balance$67.00Net cash inflowEnding cash balanceMinimum cash balance-30.00-30.00-30.00-30.00Cumulative surplus (deficit)

The question is based on the concept of Cost Accounting.

Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q3 Q4 Sales $ 110 $ 130 $ 150 $ 180 Q1 Q2 Sales for the first quarter of the following year are projected at $125 million. Accounts receivable at the beginning of the year were $49 million. Wildcat has a 45-day collection period. Wildcat's purchases from suppliers in a quarter are equal to 40 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and ro $11 million po run ab out 20 porcont of caloc Intorod and divider

Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q3 Q4 Sales $ 110 $ 130 $ 150 $ 180 Q1 Q2 Sales for the first quarter of the following year are projected at $125 million. Accounts receivable at the beginning of the year were $49 million. Wildcat has a 45-day collection period. Wildcat's purchases from suppliers in a quarter are equal to 40 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and ro $11 million po run ab out 20 porcont of caloc Intorod and divider

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 13P

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