Question 1 [75 Points]

Firm cvs has estimated sales (in millions) for the next four quarters as follows:

Sales (in milions)

Q1 Q2 Q3 Q4

70 100 120 130

Sales for the first quarter of the year after this one are projected at $110 million. Accounts receivable at the beginning of the year were $23 milion. CVS has a 20,day collection period. CVS's purchases from suppliers in a quarter are equal to 30 percent of the next quarter's forecast sales, and suppliers are normally paidin 20 days. Wages, taxes, and other expenses run about 10 percent of sales. Interest and dividends are $7 milion per quarter.CVS plans a major capital outlay in the second quarter of $50 milion. Finally, the company started the year with a $35 milion cashbalance and wishes to maintain a $25 million minimum balance. Short term borrowing rate is 5%, short term lending rate is 3%.

a-Prepare cash collection table [ 15 Points]

b- Prepare cash disbursement table [ 15 Points]

c-Prepare cash budget table [ 20 Points]

d-Prepare short-term financial plan. [ 20 Points]

e- What is the amount of cash generated by short-term financing? [ 5 Points]