1. Calculating the Cash BudgetWiggles, Inc., has estimated sales (in millions) for the next four quarters as follows: (40 ptos)

	Q1	Q2	Q3	Q4
Sales	$105	$90	$122	$140

Sales for the first quarter of the year after this one are projected at $120 million. Accounts receivable at the beginning of the year were $34 million. Wiggles, has a 45-day collection period.

Wiggles purchases from suppliers in a quarter are equal to 45 percent of the next quarters forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 30 percent of sales. Interest and dividends are $6 million per quarter.

Wiggles plans a major capital outlay in the second quarter of $40 million. Finally, the company started the year with a $32 million cash balance and wishes to maintain a $15 million minimum balance.

Complete a cash budget for Wiggles by filling in the following:

WIGGLES, INC. Cash Budget ($ in millions)
	Q1	Q2	Q3	Q4
Target cash balance	$15
Net cash inflow
Ending cash balance
Minimum cash balance	15
Cumulative surplus (deficit)

Assume that Wiggles can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter, and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Prepare a short-term financial plan by filling in the following schedule. What is the net cash cost (total interest paid minus total investment income earned) for the year?

WIGGLES, INC. Short-Term Financial Plan ($ in millions)
	Q1	Q2	Q3	Q4
Target cash balance	$15
Net cash inflow
New short-term investments
Income from short-term investments

please present the calculations