Question
QUESTION 3 The Mason Corporation has a 30-day average collection period and wishes to maintain a $5 million minimum cash balance. Based on this and
QUESTION 3
The Mason Corporation has a 30-day average collection period and wishes to maintain a $5 million minimum cash balance. Based on this and the information below, answer Questions 3 - 5.
| Mason Corporation | ||||
| Cash Budget (in millions) | ||||
|
| Q1 | Q2 | Q3 | Q4 |
| Beginning receivables | $120 |
| ||
| Sales | 90 | 120 | 150 | 120 |
| Cash collections | ||||
| Ending receivables | ||||
|
|
|
|
| |
| Total cash collections |
|
|
|
|
| Total cash disbursements | (80) | (160) | (180) | (160) |
| Net cash inflow | ||||
| Beginning cash balance | $5 | |||
| Net cash inflow | ||||
| Ending cash balance | ||||
| Minimum cash balance | ||||
| Cumulative surplus (deficit) | ||||
What is the ending receivables in the second quarter (Q2)?
| a. | $80 million | |
| b. | $90 million | |
| c. | $60 million | |
| d. | $40 million |
QUESTION 4
What is net cash inflow in the third quarter (Q3)?
| a. | -$20 million | |
| b. | $-40 million | |
| c. | -$50 million | |
| d. | -$60 million |
QUESTION 5
What is the cumulative surplus (deficit) in the fourth quarter (Q4)?
| a. | -$40 million | |
| b. | $10 million | |
| c. | $-20 million | |
| d. | -$60 million |
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Small Brewery Finance
Authors: Maria Pearman
1st Edition
1938469526, 978-1938469527
