Question
Garden Depot is a retailer that provided the following budgeted cash flows for next year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total cash
Garden Depot is a retailer that provided the following budgeted cash flows for next year:
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
---|---|---|---|---|
Total cash receipts | $ 280,000 | $ 400,000 | $ 330,000 | $ 350,000 |
Total cash disbursements | $ 344,000 | $ 314,000 | $ 304,000 | $ 324,000 |
The companys beginning cash balance for next year will be $45,000. The company requires a minimum cash balance of $10,000 and may borrow money at the beginning of any quarter and may repay any part of its loans at the end of any quarter. Interest payments, based on a quarterly interest rate of 3%, are due on any principal at the time it is repaid. For simplicity, assume interest is not compounded.
Required:
Prepare the companys cash budget for next year.
Note: Repayments, interest, and cash deficiencies should be indicated by a minus sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started