1.You are the co-founder of ACME Medical Devices, a medical device company that has been trading for the past two years. You havenow made the decision to seek extemal investment into the company to expand into overseas markets. As part of the due diligence process, potential investors have asked you to prepare a cash flow statement for the first quarter 2016. Your records show ACME Medical Devices will have the following balances on the 1st January 2016 Bank overdraft 200 Debtors 250,000 Creditors li00,000 In addition, you anticipate the following transactions during the next three months: i. New bank loan ofE200,000 to cover present overdraft on the l January 2016 to be repaid 25.000 every quarter starting 31 March 2016. ii. Sales and purchases on one month's credit as follows: Sales Purchases January 300.000 e 100.000 Februaryl360,000le120,000I March 480.000 160,000 iii. Payroll costs ofE50,000 each month. iiii. Internal R&D costs as follows: January l100,00 February 120,000 March 150,000 v. Outsourced lab testing ofE25,000 in January and a further E25,000 in March, paid at the end of the month in which the cost is incurred. vi. New patent filing costs of 5,000 in February 2016, with ongoing IP fees of 1,000 per month. vii. Advertising & Promotion costs of 4.000 per month. with an additional charge of5.000 in March to cover a national medical devices sales event. viii. Debtors and creditors must cleared within the month. Required: a) Prepare a cash budget for the three month period ending 31 March 2016. b) What level of investment would be required in order to have a closing balance of the 31 March 2016 of 500,000? c What are the advantages of preparing a cash flow statement