Calculating the Cash Budget Wildcat, Inc., has estimated sales $($in millions$)$ for the next four

quarters as follows:

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. Wildcat has a $45-$day collection period.

Wildcat's purchases from suppliers in a quarter are equal to $45$ percent of the next quarter's 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.

Wildcat 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.

a$.$ Complete a cash budget for Wildcat by filling in the following:

b$.$ Assume that Wildcat 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?

WILDCAT, INC.

short$-$Term Financial Plan

$($G in millisns$)$

QI

Q$2$

Q$3$

Q$4$

Target cash balance

Net cash inflow

New short$-$term investments

Income from short$-$term invesuments

Short$-$term inwestments sold

New short$-$term borrowing

Interest on short$-$term borrowing

Short$-$term borrowing repaid

Ending cash balance

Minimum cash balance

Cumulative surplus $($deficit$)$

Beginning short$-$term inwestunents

Ending short$-$term investments

Beginning short$-$term dabt

Ending short$-$term debt