Maoney Equipment is putting together its cash budget for the following year and has forecasted expected cash collections over the next five quarters(one year plus the first quarter of the next year). The cash collection estimates are based on sales projections and expected collection of recaivables. The sales and cash collection estimates are shown in the folowing table (in millions of dollars): 01 02 04 Q5 03 $1320 1,620 $1,670 1,470 $1,720 Sales Total cash collections 1,320 $1,370 $1,420 1,420 You also have the following information about Mooney Equipment: In any given period, Mooney's purchases from suppliers generally account for 78% of the expected sales in the next pence, and wages, supplies, and taxes are expected to be 15% of next period's sales. In the third quarter, Mooney expects to expand one of its plants, which w m lian investment. * * require an additional $1,078 Every quarter, Maoney pays $60 million in interest and dividend payments to long-term debt and equity investors, Maoney prefers to keep a minimum target cash balance of at least $16 milion at all times Using the preceding infarmation, answer the following questions What is the net cash inflow that Maoney expects in the third quarter (Q3)7 If Maoney is beginning this year with a cash balance of $39 milion and expects to maintain a minimum target cash balance of at least $16 million, what wbe its likely cash balance at the end of the year (after 94) What is the maximum investable funds that the firmn expects to have in the next year? What is the largest cash deficit that the firrn expects to suiffer in the next year? True or False: The income statement and the cash budget are exattly the same. The only difference is that the income statement is prepared semiannually, whereas the cash budget is prepared dally or monthly O False O True Maoney Equipment is putting together its cash budget for the following year and has forecasted expected cash collections over the next five quarters(one year plus the first quarter of the next year). The cash collection estimates are based on sales projections and expected collection of recaivables. The sales and cash collection estimates are shown in the folowing table (in millions of dollars): 01 02 04 Q5 03 $1320 1,620 $1,670 1,470 $1,720 Sales Total cash collections 1,320 $1,370 $1,420 1,420 You also have the following information about Mooney Equipment: In any given period, Mooney's purchases from suppliers generally account for 78% of the expected sales in the next pence, and wages, supplies, and taxes are expected to be 15% of next period's sales. In the third quarter, Mooney expects to expand one of its plants, which w m lian investment. * * require an additional $1,078 Every quarter, Maoney pays $60 million in interest and dividend payments to long-term debt and equity investors, Maoney prefers to keep a minimum target cash balance of at least $16 milion at all times Using the preceding infarmation, answer the following questions What is the net cash inflow that Maoney expects in the third quarter (Q3)7 If Maoney is beginning this year with a cash balance of $39 milion and expects to maintain a minimum target cash balance of at least $16 million, what wbe its likely cash balance at the end of the year (after 94) What is the maximum investable funds that the firmn expects to have in the next year? What is the largest cash deficit that the firrn expects to suiffer in the next year? True or False: The income statement and the cash budget are exattly the same. The only difference is that the income statement is prepared semiannually, whereas the cash budget is prepared dally or monthly O False O True
