Budgeted monthly sales revenue is as follows 1. 40,000 70,000 50,000 45,000 October November December January 2017 Sales are 20% cash and 80% credit. Credit sales are collected over a three month period, 15% in the month of sale, 70% in the month following sale and 15% in the second month following sale. Bad debts of 5% are anticipated on all credit sales. Total sales revenue in August amounts to $30,000 and September's total sales to $36,000 revenue amounts Cost of sales is expected to amount to 60% of sales revenue each month 2. The business maintains its closing inventory levels at 75% of the following month's cost of sales. Inventory at the beginning of October is expected to amount to $18,000 3. Annual Cash Savings Probability $6,000 $8,000 $10,000 Probability Useful Life 4 years 0.2 5 years 0.6 6 years 0.2 0.2 0.5 0.3 11. Information related to the asset and liabilities: Share Capital Reserves and surplus Long-term borrowing Current Liabilities 400,000 100,000 150,000 50,000 400,000 100,000 200,000 Fixed assets Non-current investment : Current Assets 12. The cash balance on 1st October is expected to amount to $8,000 Required: To calculate the purchases figure for each month from October 2016 to (2 marks (a) December 2016. To prepare a cash budget on a monthly basis and in total for the period October 2016 to December 2016 (b) (3 marks) To calculate the NPV and IRR (2marks) (c) (d) To replace an asset after 10 years. The estimated value of asset at that time will be $17,910. How much money investment invests every year by the company if the investment earns 6 percent interest every year? (2 marks) Also analyze the following ratios: i) Debit Equity ratio ii) Total Asset to Debit Ratio i)Proprietary Ratio iv) Debit to Capital Employed ratio V) (e) (2 marks) current Ratio To outline potential benefits from the preparation of a cash budget as prepared in part (b) (f) (4 marks) Budgeted monthly sales revenue is as follows 1. 40,000 70,000 50,000 45,000 October November December January 2017 Sales are 20% cash and 80% credit. Credit sales are collected over a three month period, 15% in the month of sale, 70% in the month following sale and 15% in the second month following sale. Bad debts of 5% are anticipated on all credit sales. Total sales revenue in August amounts to $30,000 and September's total sales to $36,000 revenue amounts Cost of sales is expected to amount to 60% of sales revenue each month 2. The business maintains its closing inventory levels at 75% of the following month's cost of sales. Inventory at the beginning of October is expected to amount to $18,000 3. Annual Cash Savings Probability $6,000 $8,000 $10,000 Probability Useful Life 4 years 0.2 5 years 0.6 6 years 0.2 0.2 0.5 0.3 11. Information related to the asset and liabilities: Share Capital Reserves and surplus Long-term borrowing Current Liabilities 400,000 100,000 150,000 50,000 400,000 100,000 200,000 Fixed assets Non-current investment : Current Assets 12. The cash balance on 1st October is expected to amount to $8,000 Required: To calculate the purchases figure for each month from October 2016 to (2 marks (a) December 2016. To prepare a cash budget on a monthly basis and in total for the period October 2016 to December 2016 (b) (3 marks) To calculate the NPV and IRR (2marks) (c) (d) To replace an asset after 10 years. The estimated value of asset at that time will be $17,910. How much money investment invests every year by the company if the investment earns 6 percent interest every year? (2 marks) Also analyze the following ratios: i) Debit Equity ratio ii) Total Asset to Debit Ratio i)Proprietary Ratio iv) Debit to Capital Employed ratio V) (e) (2 marks) current Ratio To outline potential benefits from the preparation of a cash budget as prepared in part (b) (f) (4 marks)