Q$6$

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

Q$1$ Q$2$ Q$3$ Q$4$

Sales $ $150$ $ $170$ $ $190$ $ $220$

Sales for the first quarter of the following year are projected at $$165$ million. Accounts receivable at the beginning of the year were $$65$ million. Wildcat has a $45-$day collection period.

Wildcat$$s purchases from suppliers in a quarter are equal to $45$ percent of the next quarter$$s forecast sales, and suppliers are normally paid in $36$ days. Wages, taxes, and other expenses run about $20$ percent of sales. Interest and dividends are $$14$ million per quarter.

Wildcat plans a major capital outlay in the second quarter of $$91$ million. Finally, the company started the year with a cash balance of $$75$ million and wishes to maintain a $$30$ million minimum balance.

a$.$ Complete the following cash budget for Wildcat, Incorporated.

Q$1$ Q$2$ Q$3$ Q$4$

$7598\mathrm{.}137\mathrm{.}271\mathrm{.}6$

$23\mathrm{.}1-60\mathrm{.}934\mathrm{.}462\mathrm{.}85$

$98\mathrm{.}137\mathrm{.}271\mathrm{.}6134\mathrm{.}45$

$-30-30-30-30$

$68\mathrm{.}17\mathrm{.}241\mathrm{.}6104\mathrm{.}45$

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.

b$-1.$ Complete the following short$-$term financial plan for Wildcat, Incorporated.