Harrison collects $2020$ percent of its sales in the month of the$$ sale, $5050$ percent in the month following the$$ sale, and the remaining $3030$ percent two months following the sale. During November and December of$2013,$ Harrison's sales were $ $219$ comma $200$$$219,200$ and $$$$174$ comma $100174,100,$ respectively.

Harrison purchases raw materials two months in advance of its sales equal to $6565$ percent of their final sales price. The supplier is paid one month after delivery. $$ Thus, purchases for April sales are made in February and payment is made in March.

In$$ addition, Harrison pays $$$$11$ comma $00011,000$ per month for rent and $$$$19$ comma $80019,800$ each month for other expenditures. Tax prepayments of $ $22$ comma $500$$$22,500$ are made each quarter beginning in March. The$$ company's cash balance as of December$31,2013,$ was $$$$22$ comma $80022,800$; a minimum balance of $$$$20$ comma $00020,000$ must be maintained at all times to satisfy the$$ firm's bank line of credit agreement. Harrison has arranged with its bank for$$ short$-$term credit at an interest rate of $1212$ percent per annum$(1$ percent per$$ month$)$ to be paid monthly. Borrowing to meet estimated monthly cash needs takes place at the end of the$$ month, and interest is not paid until the end of the following month. $$ Consequently, if the firm were to need to borrow $ $50$ comma $000$$$50,000$ during the month of$$ April, then it would pay $ $500$$$500($$ $50$ comma $000$ times $0\mathrm{.}12$ times $1$ divided by $12$$$50,000\backslash$times $0\mathrm{.}12\backslash$times $1/12)$ in interest during May. $$ Finally, Harrison follows a policy of repaying its outstanding$$ short$-$term debt in any month in which its cash balance exceeds the minimum desired balance of $$$$20$ comma $00020,000.$Harrison needs to know what its cash requirements will be for the next six months so$$ that, if$$ necessary, it can renegotiate the terms of its$$ short$-$term credit agreement with its bank. To analyze this$$ problem, the firm plans to evaluate the impact of a plus or minus $20\%\backslash$pm $20\%$ variation in its monthly sales efforts. Prepare a$$ seven$-$month cash budget for Harrison and use it to evaluate the$$ firm's cash needs.$($Note$$: You will need to prepare the cash budgets for three$$ scenarios: most likely$($sales given in LOADING... $),$ worst case$($sales down by $20\%20\%),$ and best case. January$$$$99,200$May$$$$274,700$

February$$$$119,200$June$$$$199,800$

March$$$$149,500$July$$$$200,300$

April$$$$300,900$August$$$$179,900\text{'}$