1) Onyx Corp. decides to prepare a short term financial plan which will show the cash position of that firm in the next two months of June and July. The short term plan is prepared by the end of May. The sales of Onyx Corp. were 1 800 000 in April and 2 000 000 in May. The firm estimates that the June sales will be 2 500 000 and July sales will be 2 800 000. Onyx Corp. receives 50% of sales revenue as cash in the month of sale. Since firm extends trade credit to customers; 25% of sales revenue is received as cash in the next month and 25% is received as cash after two months (e.g. 50% of June sales are received in June, 25% in July and 25% in August).

The cost of raw materials used by Onyx Corp. is 80% of sales revenue. The firm pays 70% of the cost of materials in the month of sale and 30% in the next month (e.g. 70% of the cost of raw materials in June are paid in June and 30% of the cost of raw materials used in June are paid in July). Firm also estimates the following payments in the next two months

June July

Salaries and Wages 500 000 600 000

Utilities 200 000 250 000

Social Security Payments 100 000 120 000

Rent 50 000 50 000

Given this data; prepare the short term plan of Onyx Corp. for June and July showing total estimated cash inflow, total estimated cash outflow and net cash position of the firm.

2) What must be the market price of a T-Bill whose remaining time to maturity is 4 months and whose par value is 100 000 TL in order for that T-Bill to generate an annual rate of return of 25%? (use 365 as days in a year)

3) Beta Corp. wants to decide if it is reasonable to accept checks for the sale of a refrigerator whose production cost is $ 1000. The sale price of that refrigerator is $ 1400. Customer wants to write a check and pay the sale price of the refrigerator after six months. The firm estimates that the probability of payment by the customer on time is 0.80 but there is a 20% probability that the customer may not pay. Assuming that annual interest rate in that country is 20% annually; should the firm accept the check of the customer if the FIFO score of that customer is 820 out of 1 000 ?

4) Give a brief definition of the following concepts

a) Trade Credit b) Revolving Loan c) CD (Certificate of Deposit) d) Repo