Solve for Budgeted Net Cashflow Given; Sales are broken into 10% Cash, 90% A/R.

A/R Collections: 50% the same month of sale, 30% following month of sale, 14% a second month from the sale, 6% never collected. 

Bad Debt Expense recognized at the time of sale.

Monthly purchases are comprised of 80% for this month’s sales and 20% for next month’s sales.

No inventory on hand at the start of January, 100% of inventory must be purchased plus 20% of February’s sales.

60% of payments happen during the month of purchase, 40% the following month.

Deprecation is 40% of Fixed Facilities Cost. All other fixed facilities costs and all the Selling General and Administration (SG&) fixed costs are cash expenses and are paid on June 30 for the entire year.

$1,000,000 Start-up Funding, access to a line of credit. The line of credit has an annual interest rate of 12%. The Bank requires a minimum cash balance of $1,000,000. Interest on the outstanding line of credit balance is due and paid on the first day of each month.

	January	February	March	April	May	June	July	Aug	Sep	Oct	Nov	Dec
Unit Sales	509,000	497,000	512,000	496,000	514,000	511,000	487,000	511,000	490,000	503,000	513,000	499,000
Price	$152.00	$152.00	$152.00	$151.00	$152.00	$151.00	$149.00	$149.00	$153.00	$153.00	$153.00	$152.00
Purchase Cost	63.9	65.9	66	64.3	64.3	65.7	66.4	66.8	65.2	62	66	65.5
Fixed Cost
- Facilities	$10,800,000	$11,800,000	$11,600,000	$11,300,000	$11,600,000	$11,400,000	$12,000,000	$10,800,000	$10,800,000	$11,700,000	$11,900,000	$10,600,000
- Selling, General, and Administrative	16,000,000	16,900,000	16,900,000	16,100,000	17,000,000	16,200,000	16,700,000	16,700,000	16,400,000	16,800,000	16,200,000	16,900,000