Explain how to complete the empty problem 2 Using the following example calculation method which was already answered from problem 1

Problem 1

2. Notes Payable Worksheet Months: Oct. Nov. Sales $400,000 410,000 420,000 Cash and Accounts Receivable Collections: Cash: 10% immediately Accounts Receivables: 87% within 30 days Total Cash Collections from Sales Interest Income (+) or Expense (-) Net Revenues Expenses or COGS: 80% of Sales Paid Immediately 40% Accounts Payable: 30 days: 60% Incomplete Taxes Payables Wages Payables 20,000 30,000 Administrative Expenses: 10% of COGS Total Expenses Incomplete Net Income Incomplete Begin. Cash and Marketable Securities 60,000 Ending Cash and MS Balance __40,000 -Minimum Operating Cash (MOC) 150,000 Excess Funds (+) .036/12 Needed Funds (-) .06/12 Dec. 35,000 Jan. 300,000 55,000 10,000 1. Present Value of Operating Cash Flow using the Short-term Financial Management Model: Operating Cash Flow is $ 210,000, the discount rate is 9%, year =365 days, and the cash conversion cycle is 45 days. Calculate the Present Value of Cash Flow from Operations: 1. Present Value of Operating Cash Flow using the Short-term Financial Management Model: Operating Cash Flow is $ 170,500, the discount rate is 6%, year =365 days, and the cash conversion cycle is 30 days. Calculate the Present Value of the Cash Flow from Operations. i =.06/365 =.000164383 $170,500 / (1 + (.000164383 x 30) = 170,500/ 1.004931507 =$169,663.30 Question 2 Explained: The Cash is paid immediately. A 30 -day delay means Sales made in December are collected in January. The collections are color coded with the corresponding Sales that they are associated with. The expense or COGS are also aged and color coded. Don't double count Sales or COGS. Start adding with the Cash of 40% line when totaling Total Cash Collections from Sales. The ending balance of a prior month is the beginning balance for the next month. For example, the ending balance of $30,000 in December is the beginning balance of January. The ending balance information for December is assumed so that January can be done. A business would have the information for prior months. Interest Income or Interest expense is calculated at the end of the worksheet. It is then added/subtracted from total cash collection from sales (located near top of the worksheet). The last worksheet procedure done is to calculate Net Revenues. 2. Notes Payable Worksheet: Months: Dec. Jan. Feb. March. Sales 4800000 700000 400000 = 500000 Cash 40% 320,000 Accounts Receivables: 30 days are 57% Incomplete Total Cash Collections from Sales Interest Income (+) or Expense (-) Revenues, 280,000 736,000 -50 735,950 200,000 329.000 559,000 428,000 _36488___ _ 898.29 559364.88 428898.29 Expensesor COGS: 75% of Sales 600000 525000 300000 375000 Paid Immediately 90% 540,000 Accounts Payable: 30 days are 8% Incomplete Taxes Payables Wages Payables 1% of Sales 8000 Administrative Expenses: 10% of COGS 60,000 Total Expenses Incomplete Net Income=Revenues-Total Expenses Incomplete +Begin. Cash and Marketable Securities Ending Cash and MS Balance 30,000 Minimum Operating Cash (MOC) -40,000 Excess Funds (+) .03/12 Needed Funds (-) .06/12 10,000 472,500 48,000 7000 337500 42,000 200,000 4000 5000 22500 30000 37500 580,000 155,950 + 30,000 185,950 -40,000 145,950 Borrow $10,000 x .06/12 = -$50 see Interest expense (negative number) 346,000 604,000 213,364.88 -175101.72 +185950 +399314.88 399,314.88 224,213.17 359,314.88 184,213.17 Net Revenues are calculated after the interest income or interest expense is calculated $145,950 x .03/12 = +364.88 interest income