Problem 26 14 Cash Management Policy Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows Sales Q1 $ 130 Q2$ 150 Q3$ 170 Q4$ 200 Sales for the first quarter of the year after this one are projected at $145 million Accounts receivable at the beginning of the year were $57 million Wildcat has a 45 day collection period Wildcat plans a major capital outlay in the second quarter of $68 million Finally, the company started the year with a cash balance of $71 million and wishes to maintain a minimum balance of $40 million a 1 Assume that Wildcat can borrow any needed funds on a short term basis at a rate of 3 percent per quarter and can invest any excess funds in short term marketable securities at a rate of 2 percent per quarter Complete the following short term financial plan for Wildcat (A negative answer should be indicated by a minus sign Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e g , 32 16 Leave no cells blank be certain to enter 0 wherever required ) Wildcat plans a major capital outlay in the second quarter of $68 million Finally, the company started the year with a cash balance of $71 million and wishes to maintain a minimum balance of $40 million Wildcat plans a major capital outlay in the second quarter of $68 million Finally, the company started the year with a cash balance of $71 million and wishes to maintain a minimum balance of $40 million a 2 What is the net cash cost (total interest paid minus total investment income earned) for the year under this target cash balance (A negative answer should be indicated by a minus sign Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e g , 32 16 Leave no cells blank be certain to enter 0 wherever required ) b 1 Complete the following short term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million (A negative answer should be indicated by a minus sign Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e g , 32 16 Leave no cells blank be certain to enter 0 wherever required ) b 2 What is the net cash cost for the year under this target cash balance (A negative answer should be indicated by a minus sign Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e g , 32 16 Leave no cells blank be certain to enter 0 wherever required )

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Problem 26-14 Cash Management Policy Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Sales: Q1 $ 130 Q2$ 150

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Problem 26-14 Cash Management Policy

Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows:

Sales: Q1 $ 130 Q2$ 150 Q3$ 170 Q4$ 200

Sales for the first quarter of the year after this one are projected at $145 million. Accounts receivable at the beginning of the year were $57 million. Wildcat has a 45-day collection period.

Wildcat plans a major capital outlay in the second quarter of $68 million. Finally, the company started the year with a cash balance of $71 million and wishes to maintain a minimum balance of $40 million.

a-1.

Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)

a-2.

What is the net cash cost (total interest paid minus total investment income earned) for the year under this target cash balance? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)

b-1.

Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)

b-2.

What is the net cash cost for the year under this target cash balance? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)