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Balance Sheet 2007 2008 2009 2010 2011 Cash / Equivlants 75 75 90 100 100 Accounts Receivable 300 400 600 550 500 Inventory 150 250

Balance Sheet
2007 2008 2009 2010 2011
Cash / Equivlants 75 75 90 100 100
Accounts Receivable 300 400 600 550 500
Inventory 150 250 350 250 250
Net Fixed Assets 525 575 610 540 465
Total Assets 1050 1300 1650 1440 1315
Accounts Payable 125 175 250 225 200
Notes Payable 165 162 178 136 99
Accured operating Exp. 60 161 165 89 76
Long term-debr 500 400 300 100 50
stockholders equity 200 402 757.2 890.2 890.2

total liabilties

1050 1300 1650 1440 1315
Income Statement 2007 2008 2009 2010 2011
Revenue 1500 2250 3000 2000 1500
Cost of Good sold 600 900 1200 800 600
Operating Expenses 600 797 895 750 725
Depreciation 35 50 65 70 75
Interest 30 33 28 25 10
Taxes 94 188 325 142 36
NET PROFIT 141 282 487.2 213 54
Dividends 40 80 132 80 54

Suppose that the treasurer of J. Washam targets a cash burn rate of 250 days for the firm in the year 2012.

a) Assuming that COGS are expected to remain unchanged from 2011, then what change (increase or decrease) in cash would be warranted?

B) Assuming that cash holdings will remain unchanged from 2011, then what change (increase or decrease) in COGS would be warranted.

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