The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has

Question

74 users unlocked this solution today!

The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments: Collections Payments Month Cash Sales $10,000 $12,000 $14,000 $16,000 $20,000 Credit Sales Purchases Wages Miscellaneous Expenses $6000 $1,500 $2,000 $2,500 $3,000 $4,000 $4,500 July $20,000 $24,000 $28,000 August September October November $32,000 $40,000 December $25,000 $50,000 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. $15,000 $18,000 $7.200 $21,000 $8,400 $24,000 $9,600 $30,000 $12,000 $37,500 $15,000 b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%. c) Determine the impact on the ending cash balance if the firm uses any cash surplus above the required minimum cash balance to pay off its short-term borrowing monthly.