1. Use the numbers given to complete the cash budget and short-term financial plan.

2. Rework the cash budget and short-term financial plan assuming Piepkorn changes to a minimum balance of $100,000.

3. You have looked at the credit policy offered by your competitors and have determined that the industry standard credit policy is 1/10, net 40.* The discount will begin to be offered on the first day of the first quarter. You want to examine how this credit policy would affect the cash budget and short-term financial plan. If this credit policy is implemented, you believe that 40 percent of all sales will take advantage of it, and the accounts receivable period will decline to 36 days. Rework the cash budget and short-term financial plan under the new credit policy and a minimum cash balance of $100,000. What interest rate are you effectively offering customers?

4. You have talked to the company's suppliers about the credit terms Piepkorn receives. Currently, the company receives terms of net 45. The suppliers have stated that they would offer new credit terms of 1.5/15, net 40. The discount would begin to be offered on the first day of the first quarter. What interest rate are the suppliers offering the company? Rework the cash budget and short-term financial plan assuming you take the credit terms on all orders and the minimum cash balance is $100,000. Also assume that Piepkorn offers the credit terms in the previous question.

PIEPKORN MANUFACTURING Cash Budget Q1 Q2 Q3 24 Target cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) PIEPKORN MANUFACTURING Short-Term Financial Plan Q1 Q2 Q3 Q4 Target cash balance 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 investnents Ending short-term investments Beginning short-tern debt Ending short-term.debt