Phil Trigg is the owner of Trigg Electronics Ltd. He has negotiated with two manufacturers of electric circuit boards to carry out assembly work for them and anticipates assembling the following numbers of circuit boards for each manufacturer during 2012.

Customer A has agreed to pay £6.60 for each board assembled and Customer B will pay £6.50. Customer A will pay 2 months after the work has been done, but Customer B will pay one month after the work has been done. Phil anticipates the following expenses:

Required

(a) Prepare a cash flow forecast for Trigg Electronics Ltd for 6 months, 1 January to 30 June 2012.

(b) Calculate the amount of capital Phil needs to invest in the business to prevent a cash deficit at any time during the 6 months.

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Sales volume Jan Feb Mar May Jun Jul Aug Sep Oct Nov Dec Customer A 120 130 130 150 140 140 160 160 170 140 140 120 Customer B 200 240 240 240 220 220 220 270 270 270 230 210