The actual sales and purchases for Xenocore, Inc., for September and October

2019,

along with its forecast sales and purchases for the period November

2019

through April

2020,

follow

LOADING...

. The firm makes

20%

of all sales for cash and collects on

40%

of its sales in each of the 2 months following the sale. Other cash inflows are expected to be

$12,000

in September and April,

$15,000

in January and March, and

$27,000

in February. The firm pays cash for

10%

of its purchases. It pays for

50%

of its purchases in the following month and for

40%

of its purchases 2 months later. Wages and salaries amount to

20%

of the preceding month's sales. Rent of

$20,000

per month must be paid. Interest payments of

$10,000

are due in January and April. A principal payment of

$30,000

is also due in April. The firm expects to pay cash dividends of

$20,000

in January and April. Taxes of

$80,000

are due in April. The firm also intends to make a

$25,000

cash purchase of fixed assets in December. a. Assuming that the firm has a cash balance of

$22,000

at the beginning of November, determine the end-of-month cash balances for each month, November through April.b. Assuming that the firm wishes to maintain a

$15,000

minimum cash balance, determine the required total financing or excess cash balance for each month, November through April.

c. If the firm were requesting a line of credit to cover needed financing for the period November to April, how large would this line have to be? Explain your answer.

a. Assuming that the firm has a cash balance of

$22,000

at the beginning of November, determine the end-of-month cash balances for each month, November through April.