Mooney 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 next year). The cash collection estimates are based on sales projections and expected collection of receivables. The sales and cash collection estimates are shown in the following table (in millions of dollars):

	Q1	Q2	Q3	Q4	Q5
Sales	$1,100	$1,400	$1,450	$1,250	$1,500
Total cash collections	$1,100	$1,150	$1,200	$1,200

You also have the following information about Mooney Equipment:

	You are at the end of the current year, and Q1 is the next period.
	In any given period, Mooneys purchases from suppliers generally account for 72% of the expected sales in the next period, and wages, supplies, and taxes are expected to be 15% of the next periods sales.
	In the third quarter, Mooney expects to expand one of its plants, which will require an additional $1,072 million investment.
	Every quarter, Mooney pays $45 million in interest and dividend payments to long-term debt and equity investors.
	Mooney prefers to keep a minimum target cash balance of at least $14 million at all times.

Using this information, complete the following table by making necessary calculations. (Note: Round intermediate calculations to the nearest whole dollar.)

The net cash inflow that Mooney expects in the first quarter (Q1)
Mooneys likely cash balance at the end of the year (after Q4). (Hint: Assume that at the beginning of the year, Mooneys cash balance is $36 million and it expects to maintain a minimum target cash balance of at least $14 million.)
The maximum investable funds that the firm expects to have in the next year.
The largest cash deficit that the firm expects to suffer in the next year.

True or False: Based on the surplus or deficit derived from the cash budget, managers negotiate for short-term loans with banks. They often add a cushion to the difference between forecasted ending cash balance and the minimum target cash balance.

False

True