(Learning Objective 3: Preparing a cash budget) Cole Communications, Inc., is preparing its cash budget for 20X7. Cole ended 20X6 with cash of $86 million, and managers need to keep a cash balance of at least $82 million for operations.

Collections from customers are expected to total $11,305 million during 20X7, and payments for the cost of services and products should reach $6,167 million. Operating expense payments are budgeted at $2,544 million.

During 20X7, Cole expects to invest $1,826 million in new equipment and sell older assets for $118 million. Debt payments scheduled for 2011 will total $603 million. The company forecasts net income of $885 million for 2011 and plans to pay dividends of $347 million.

Prepare Cole Communications’ cash budget for 20X7. Will the budgeted level of cash receipts leave Cole with the desired ending cash balance of $82 million, or will the company need additional fi nancing? If so, how much?