Q3. Fill in the blanks of Table 1: Monthly Cash Outflows andTable 2: Monthly Cash Inflows. Then, use the information to generate Table3:Pro-Forma Cash Flow Budgetand answer the following questions.(10 points in total)

Table 1: AgBiz Estimated Monthly Cash Outflows (Jan.Apr.)

Item	Jan	Feb	Mar	Apr
Sales	$8,000		$7,000
Purchases($)	$1,500		$4,000	$5,000
Payment of Account Payable	$7,000	$4,000
Payment of Overhead	$1,000	$1,000	$1,000	$1,000
Total Cash Outflows
Inventory Levels	$5,000

Assumptions:

1. The inventory turnover rate is 12.

2. Inventory is equal to current month's purchases + previous month's purchases

3. Cost of goods sold=25% of sales

4. Account payable turnover ratio=6.

Table 2: AgBiz Estimated Cash Inflows (Jan. Apr.)

Item	Jan	Feb	Mar	Apr
Sales	$8,000		$7,000
Cash Sales($)			$1,750
Account Receivable (1 month old)	$4,000
Account Receivable (3 month old)	$2,000	$2,000	$1,000
Total Cash Inflows

Assumptions:

1. Sales are 1/4cash, and3/4 credits.

2. Account Receivable ratio is 4.

Table 3: Pro-Forma Cash Flow Budget

Item	Jan	Feb	Mar	Apr
Initial Cash Balance	$1,000	$1,000	$1,000	$1,000
Cash Inflow
Total cash available
Cash Outflow
Net Cash
Need Borrowings
End Cash Balance	$1,000	$1,000	$1,000
Cumulative borrowings

(Hint: These three tables are consistent. You are able to get cash inflow from table 2 and cash outflow from table 3)

Based on the above Pro-Forma Cash Flow Budget, answer the following two questions:

(1) Does the business need to borrow money? If yes, how much money needs to be borrowed?

(2) When does the money need to be borrowed? When will the loan be repaid?