Forecast of payables (20 points) Altman Inc. forecasts the following purchases from suppliers: Month January February March April May June Value of goods 32 28 25 22 20 20 ($ millions)

A) Forty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of one month. If Altman Inc. starts the year with payables of $22 million, what is the forecasted level of payables for each month?

B ) Suppose that from the start of the year the company stretches payables by paying 40% after one month and 20% after two months. (The remainder continue to be paid cash on delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment.