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 the 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	$1,210	$1,510	$1,560	$1,360	$1,610
Total cash collections	$1,210	$1,260	$1,310	$1,310

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 78% 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 $1,078 million investment.
	Every quarter, Mooney pays $55 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 $16 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 fourth quarter (Q4)
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 $39 million and it expects to maintain a minimum target cash balance of at least $16 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.

Options:

1. What is the net cash inflow that Mooney expects in the first quarter (Q4): -250/-1088/-243/-246M

2.Mooney's likely cash balance at the end of the year (after Q4):-211/-1788/-1545/-457

3.The maximum investable funds that the firm expects to have in the next year:-227/-159/-193/-114

4.The largest cash deficit that the firm expects to suffer in the next year(Q3)=-1082/-902/-1804/-126

True or False: If a firm changes its credit policy and allows customers to pay in 90 days instead of 60 days and everything else remains the same, the net cash flow in the next quarter is likely to decrease.

True

False