Page 11 of MBAC-5103 MA Assignment 3 Requirement 3b: Branch Expansion Cash Budget Financing a Bank Loan Assume that the five owners of Mountain Sports Ltd. decide to collectively invest $114,000 of personal funds into the Canmore expansion. Mountain Sports will require an open line of credit up to a maximum of $350,000. It will be necessary to convince the bank manager of this new Canmore branch ability to repay its line credit plus interest within a year. Prepare a Cash Budget for the first year of operation of Canmore by quarter and in total, Show clearly on your budget the quarter(s) in which borrowing will be needed and the quarter(s) in which repayments can be made, as requested by the company's bank. Additional Information: a) Sales by quarter are 15%, 5%, 25%, and 55% of annual sales. b) 60% of all sales are cash. The rest are credit sales which will be collected in the following quarter c) Merchandise purchases (or cost of goods sold) are all paid in the quarter following purchase. All purchases are made in the same quarter that sales occur. d) The beginning cash balance is $114,000. This is the amount the owners are capable of investing in this new venture. A minimum of $25,000 balance is needed at the end of each quarter. If any interest is payable on credit line borrowings, you may assume a reasonable interest rate. Borrowings are assumed to be at the beginning of the quarter and repayments at the end allowing for a calculation of interest based on the previous quarter's borrowing and is paid at the beginning quarter following the borrowings. e) In year 1, income tax installments of $9,500 per quarter will be made. 17:36 722