Scenario

Carefabric Company Ltd$.$ is planning to request a line of credit from its bank in an attempt to expand its operation based on the response from customers to their product lines. They will have to prepare a projection of cash flow to accompany the paperwork to be submitted to the bank.

The following sales forecasts have been made for parts of $2024$ and $2025$:

$\backslash$table$[[$June $2024,450,000],[$July$,650,000],[$August$,550,000],[$September$,650,000],[$October$,450,000],[$November$,400,000],[$December$,575,000],[$January $2025,100,000],[$February$,150,000]]$

Collection estimates obtained from the accounts department are as follows:

a$)$ Cash for June is collected in full within the month of sale;

b$)$ Cash for July to September are collected as follows

$20\%$ collected within the month of sale

$60\%$ collected the month following sale

$20\%$ collected in the second month following sale

c$)$ The remaining months, October $2024$ to February $2025$ cash collected in full within the month.

Payments for labor and raw materials are typically made during the month in which these costs are incurred. Total labor and raw materials costs are estimated for each month are as follows:

$\backslash$table$[[$June $2024,$$$375,000$