A- Prepare a monthly cash budget for the last 6 months of 2021. All payments and expenses should be entered as positive numbers. Net cash losses, negative cash balance, negative cumulative cash, and cumulative loans outstanding, if any, should be indicated by a minus sign.

	July	August	September	October	November	December
Collections and purchases worksheet
Sales (gross)
Collections
During month of sale
During 1st month after sale
During 2nd month after sale
Total collections
Purchases
Labor and raw materials
Payments for labor and raw materials
Cash gain or loss for month
Collections
Payments for labor and raw materials
General and administrative salaries
Lease payments
Miscellaneous expenses
Income tax payments
Design studio payment
Total payments
Net cash gain (loss) during month
Loan requirement or cash surplus
Cash at start of month
Cumulative cash
Target cash balance
Cumulative surplus cash or loans
outstanding to maintain $95,000
target cash balance

B- repare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. Required financing, if any, should be indicated by a minus sign.

	Required financing or
	excess funds
July
August
September
October
November
December

C- if Bowers' customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. Enter your answers as positive numbers.

To complete the sensitivity analysis, follow these steps in excel:

• Ensure that cell A60 is a reference to cell B56 (i.e. "=B56").
• Select/highlight cells A60 through H69 (A60:H69).
• From the top ribbon, select Data > Forecast > What-If-Analysis > Data Table
• For row input cell click on cell B5 or enter $B$5.
• For column input cell click on cell B14 or manually enter $B$14.
• Click "Ok".

	% Collections in 2nd month
Change in sales	0%	15%	30%	45%	60%	75%	90%
-100	%
-75	%
-50	%
-25	%
0	%
25	%
50	%
75	%
100	%