Ahmed Ltd is considering investing in a new machine in November which costs 60,000 and has a five year useful economic life. In order to support the request for funding Ahmed Lad has produced a Profit and Loss(P&L.) forecast for the new project covering the first six months of its life which he has presented to the bank (this is presented below). However, the bank has claimed that this P&L is insufficient for the bank to make a lending decision and has requested a detailed month-by-month cash flow forecast. (All figures in D Nor Dec 88,00 110,000 Jan 121,000 Feb 143. KO March 180KO April 198.000 Sales Less: Variable Costs Material Costs Labour Costs Contribution Less: Fixed Costs Depreciation Overheads Operating Profit 44,000 11.NO 33.000 66KKO 13,200 30,000 BRANDO 17,600 15,400 99,00 22.00 22,000 121,000 26,400 32.600 133.100 29.01-40 35.860 1.000 11,000 21,000 1.000 11,000 18.800 1.000 11.000 3,400 1,000 16,500 4,500 1,000 16,500 15,100 1.000 16,500 18,360 The following additional information is available: 1) Sales are 40. cash and 60. credit Credit Sales are paid two months after the month of sale. 2) Purchases are paid in the month following the purchase. 3) 75. of wages are paid in the current month and 25. the following month. 4) Overheads are paid in the month after they are incurred. 5) There will be a dividend payment of 10,000 in March. 6) Capital Expenditure is paid two months after it is incurred. 7) The management of Ahmed will contribute 16,500 in cash into the project to start with Required: (a) Prepare a month-by-month cash flow forecast, including a total column, for the first six months of the project's life. Include cash brought forward and cash carried forward amounts each month starting with the initial cash amount above made available to the project (12 marks) (b) Discuss the cash position of the business as shown by your cash flow forecast in part (a) and how the business could improve its cash position. (8 marks) WORD COUNT GUIDANCE: 300 WORDS+/-10% Total 20 Marks