Helen Bowers, owner of Helen's Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2021 and 2022: May 2021 $140,000 June 140,000 July 280,000 August 420,000 September 560,000 October 280,000 November 280,000 December 70,000 January 2022 140,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2021 $70,000 June 70,000 July 84,000 August 644,000 September 238,000 October 182,000 November 126,000 December 70,000 General and administrative salaries are approximately $30,000 a month. Lease payments under long-term leases are $10,000 a month. Depreciation charges are $40,000 a month. Miscellaneous expenses are $3,000 a month. Income tax payments of $57,000 are due in September and December. A progress payment of $175,000 on a new design studio must be paid in October. Cash on hand on July 1 will be $134,000, and a minimum cash balance of $90,000 should be maintained throughout the cash budget period. e. If Bowers' customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. Enter your answers as positive numbers. To complete the sensitivity analysis, follow these steps in excel: o Ensure that cell A60 is a reference to cell B56 (i.e. "=B56"). o Select/highlight cells A60 through H69 (A60:H69). o From the top ribbon, select Data > Forecast > What-If-Analysis > Data Table o For row input cell click on cell B5 or enter $B$5. o For column input cell click on cell B14 or manually enter $B$14. o Click "Ok". % Collections in 2nd month 0% 15% 45% 75% Change in sales 90% -100% $ $ $ $ -75% $ $ $ $ -50% $ $ $ $ -25% $ $ $ $ 0% $ $ 25% $ $ 50% $ $ 75% $ $ 100% $ $ $ $ $ $ $ $ $ $ $ 30% $ $ $ $ $ $ $ $ $ $ 60% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Helen Bowers, owner of Helen's Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2021 and 2022: May 2021 $140,000 June 140,000 July 280,000 August 420,000 September 560,000 October 280,000 November 280,000 December 70,000 January 2022 140,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2021 $70,000 June 70,000 July 84,000 August 644,000 September 238,000 October 182,000 November 126,000 December 70,000 General and administrative salaries are approximately $30,000 a month. Lease payments under long-term leases are $10,000 a month. Depreciation charges are $40,000 a month. Miscellaneous expenses are $3,000 a month. Income tax payments of $57,000 are due in September and December. A progress payment of $175,000 on a new design studio must be paid in October. Cash on hand on July 1 will be $134,000, and a minimum cash balance of $90,000 should be maintained throughout the cash budget period. e. If Bowers' customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. Enter your answers as positive numbers. To complete the sensitivity analysis, follow these steps in excel: o Ensure that cell A60 is a reference to cell B56 (i.e. "=B56"). o Select/highlight cells A60 through H69 (A60:H69). o From the top ribbon, select Data > Forecast > What-If-Analysis > Data Table o For row input cell click on cell B5 or enter $B$5. o For column input cell click on cell B14 or manually enter $B$14. o Click "Ok". % Collections in 2nd month 0% 15% 45% 75% Change in sales 90% -100% $ $ $ $ -75% $ $ $ $ -50% $ $ $ $ -25% $ $ $ $ 0% $ $ 25% $ $ 50% $ $ 75% $ $ 100% $ $ $ $ $ $ $ $ $ $ $ 30% $ $ $ $ $ $ $ $ $ $ 60% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $