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Bobby is a skilled baker who worked for several years in a patisserie in Paris. On returning to Melbourne in 2016, she decided to open
Bobby is a skilled baker who worked for several years in a patisserie in Paris. On returning to Melbourne in 2016, she decided to open her own business, Bobbys Bakery, to sell her unique pastries. Her ultimate goal is to franchise Bobbys Bakery to fund her early retirement.
Based on the cash flow statement shown, what is the current cash runway for Bobbys Bakery? Select the best answer below, rounded to the closest 6 months.
Group of answer choices
6 months
1 year
Infinite, as the cash burn rate is negative
18 months
January $42.125 February $42.000 March $41.625 April $41.500 May $49.500 June $49.125 $10.000 $10,000 $10.000 $20.000 $10,000 $10,000 $10,000 $10,000 $10,000 $20,000 $10,000 $10,000 $6,125 $6,375 $6.125 $8.000 $6.375 $6.125 Cash flow for Bobby's Bakery for the year ending 30 June 2017 CASH FLOW July August September October November December OPENING BALANCE $35.000 $34.875 $34.750 $34.375 $34,250 $34.125 Cash incoming Sales $10.000 $10.000 $10,000 $10.000 $10,000 $20.000 Asset sales Debtor receipts Other income Total incoming $10,000 $10,000 $10,000 $10,000 $10,000 $20,000 Cash outgoing Purchases (stock etc) $6.125 $6.125 $6,375 $6,125 $6.125 $8,000 Advertising & marketing Bank fees & charges Utilities (electricity, gas, water) $1,500 $1.500 $1.500 $1,500 $1,500 $1.500 Telephone $150 $150 $150 $150 $150 $150 Lease/loan payments Rent & rates $1.250 $1.250 $1.250 $1.250 $1.250 $1.250 Motor vehicle expenses Repairs & maintenance Stationery & printing Insurance Superannuation $100 $100 $100 $100 $100 $100 Wages (including PAYG) $1,000 $1.000 $1,000 $1.000 $1.000 $1.000 More. Total outgoing $10,125 $10,125 $10,375 $10,125 $10,125 $12,000 $1.500 $150 $1.500 $150 $1.500 $150 $1,500 $150 $1.500 $150 $1.500 $150 $1.250 $1.250 $1.250 $1.250 $1.250 $1.250 $100 $1,000 $100 $100 $1.000 $100 $100 $1.000 $100 $1.000 $1.000 $1.000 $10,125 $10,375 $10,125 $12,000 $10,375 $10,125 Monthly cash balance CLOSING BALANCE -$125 $34,875 -$125 $34,750 -$375 $34,375 -$125 $34,250 -$125 $34,125 $8,000 $42,125 -$125 $42,000 -$375 $41,625 -$125 $41,500 $8,000 $49,500 -$375 $49,125 -$125 $49,000Step by Step Solution
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