Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Please answer a, b and c Multiple cash budgetsScenario analysis Brownstein, Inc., expects sales of $98,000 during each of the next 3 months. It will

image text in transcribedPlease answer a, b and c

Multiple cash budgetsScenario analysis Brownstein, Inc., expects sales of $98,000 during each of the next 3 months. It will make monthly purchases of $55,000 during this time. Wages and salaries are $16,000 per month plus 4% of sales. Brownstein expects to make a tax payment of $24,000 in the next month and a $15,000 purchase of fixed assets in the second month and to receive $7,000 in cash from the sale of an asset in the third month. All sales and purchases are for cash. Beginning cash and the minimum cash balance are assumed to be zero. a. Construct a cash budget for the next 3 months. b. Brownstein is unsure of the sales levels, but all other figures are certain. If the most pessimistic sales figure is $81,000 per month and the most optimistic is $121,000 per month, what are the monthly minimum and maximum ending cash balances that the firm can expect for each of the 1-month periods? c. Briefly discuss how the financial manager can use the data in parts a. and b. to plan for financing needs. a. Construct a cash budget for the next 3 months. Complete the Brownstein, Inc.'s cash budget for the 1st month below: (Round to the nearest $000.) Brownstein, Inc. Cash Budget ($000) 1st Month Most likely scenario Sales $ Sale of asset $ Purchases $ $ Wages and salaries Taxes $ $ Purchase of fixed asset Net cash flow $ Add: Beginning cash Ending cash $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Management

Authors: Jeff Madura

11th Edition

0538482966, 9780538482967

More Books

Students explore these related Finance questions