The company requires a minimum cash balance of $50,000. All borrowings and repayments are done in even $1,000 increments. All borrowings are done on the first day of the quarter, and repayments are made on the last day of the quarter. For each quarter, only a borrowing or a repayment is made. Interest for all monies borrowed during a quarter is computed and accrued on the last day of the quarter and paid to the bank in the following quarter. Money borrowed is charged interest at a 8% annual rate. [Borrowing and Interest Example - If BW computes that the company will need to borrow $20,000 for the first quarter, the loan would occur on January 1 and interest expense during the first quarter would be $400 and this interest would be paid to the bank in the second quarter. If in the second quarter, BW determines that it will be able to repay the $20,000 loan, the repayment would occur on the last day of the second quarter or June 30. Interest expense for the second quarter would $400 and this interest would be paid in the third quarter.]

Quarter 2 $0 3 $50,362 4 Year $79,294 $74,000 $74,000 $ 769,280 $843,280 $826,280 $877,120 $842,240 $892,602 $598,360 $677,654 $2,878,400 $2,952,400 $330,000 $387,000 $199,200 $402,200 8 -9 30 Beginning Cash Balance 31 Cash Reciepts 2 Collection from Customers 3 Total Available Cash 34 Minus Cash Disbursements 35 Materials 6 Selling and Admin Exp. 37 New Equipment 8 Dividends 9 Total Cash Disbursements 0 Excess/deficiency Cash after disbursements 1. Finance: 2 Interest Paid 3 Excess/deficiency Cash after disbursements 34. Borrowings 25 Repayments 26 Ending Cash Balance 27 $318,120 $408,920 $50,000 $25,000 $802,040 $75,080 $212,760 $406,200 40000 $25,000 $683,960 $208,642 $1,060,080 $1,604,320 $90,000 $100,000 $2,854,400 $98,000 $25,000 $742,000 $101,280 $25,000 $626,400 $51,254 $0 $0 $0 $0 $0