Problem 26 >>> Intro It is the beginning of January. Actual sales for the previous quarter (Q4) and estimated sales for the next five quarters are as follows (in $ million): Quarter Q4 Q1 Q2 Q3 Q4 Q1 Sales 77 63 68 70 92.4 75 Your average collection period (days sales outstanding) is 30 days and your average payables deferral period is 50 days. You expect to always spend 40% of the following quarter's sales on purchases of components from suppliers. Wages and other expenses add up to 35% of each quarter's sales. You have to pay $4 million in interest each quarter, and plan to spend $60 million on new machinery in Q2. You start the year with $3 million in cash. Assume that each quarter has 90 days, sales occur evenly throughout the quarter and all other cash flows occur at the end of the quarter. Part 1 B Attempt 1/10 for 10 pts. Add a worksheet to your spreadsheet and label it "Collections." What fraction of each quarter's sales gets collected during that same quarter? 2+ decimals Submit Part 2 B|Attempt 1/10 for 10 pts. What fraction of the previous quarter's sales ends up as the beginning accounts receivable balance in each quarter? 3+ decimals Submit Part 3 1 - Attempt 1/10 for 10 pts. Add some rows to the spreadsheet showing sales (Q4 to Q4), beginning receivable balances, current sales collected and total cash collected for Q1 to Q4. What is your expected total cash collection in (future) Q4 (in $ million)? 0+ decimals Submit Part 4 18 Attempt 1/10 for 10 pts. Add another worksheet to your spreadsheet and label it "Disbursements." What fraction of each quarter's purchases gets paid during that same quarter? 3+ decimals Attempt 1/10 for 10 pts. Part 5 What fraction of the previous quarter's purchases ends up as the beginning accounts payable balance in each quarter? 2+ decimals Submit Attempt 1/10 for 10 pts. Part 6 Add some rows to the spreadsheet showing sales (Q1 to Q1), purchases (Q4 to Q4), beginning payable balances and current purchases paid for Q1 to Q4. What is your expected payment for current purchases in (future) Q4 (in $ million)? 1+ decimals Submit Attempt 1/10 for 10 pts. Part 7 Add some more rows to the disbursement worksheet showing wages & other expenses, interest payments and capital expenditure and total cash disbursements for Q1 to Q4. What is your expected total cash disbursement in (future) Q4 (in $ million)? 0+ decimals Part 8 1 | Attempt 1/10 for 10 pts. Add another worksheet to your spreadsheet and label it "Cash budget". Add rows for beginning cash balance, cash collections, cash disbursements and ending cash balance for Q1 to Q4. What is your expected cash balance at the end of Q4 (in $ million)? 1+ decimals Submit 1 Attempt 1/10 for 10 pts. Part 9 Company policy is to borrow just enough every quarter to prevent the cash balance from becoming negative. Rename "Ending cash balance" to "Intermediate cash balance" on worksheet "Cash budget" and add two rows for short-term debt issuance and ending cash balance. What is the ending cash balance in Q4 (in $ million)? 1+ decimals Submit Part 10 Attempt 1/10 for 10 pts. The company also has a policy of repaying short-term debt as much as cash flows allow. Insert another row for debt repayment between debt issuance and ending cash balance, and add two rows for beginning debt and ending debt. What is the ending cash balance in Q4 (in $ million)? 0+ decimals Submit Problem 26 >>> Intro It is the beginning of January. Actual sales for the previous quarter (Q4) and estimated sales for the next five quarters are as follows (in $ million): Quarter Q4 Q1 Q2 Q3 Q4 Q1 Sales 77 63 68 70 92.4 75 Your average collection period (days sales outstanding) is 30 days and your average payables deferral period is 50 days. You expect to always spend 40% of the following quarter's sales on purchases of components from suppliers. Wages and other expenses add up to 35% of each quarter's sales. You have to pay $4 million in interest each quarter, and plan to spend $60 million on new machinery in Q2. You start the year with $3 million in cash. Assume that each quarter has 90 days, sales occur evenly throughout the quarter and all other cash flows occur at the end of the quarter. Part 1 B Attempt 1/10 for 10 pts. Add a worksheet to your spreadsheet and label it "Collections." What fraction of each quarter's sales gets collected during that same quarter? 2+ decimals Submit Part 2 B|Attempt 1/10 for 10 pts. What fraction of the previous quarter's sales ends up as the beginning accounts receivable balance in each quarter? 3+ decimals Submit Part 3 1 - Attempt 1/10 for 10 pts. Add some rows to the spreadsheet showing sales (Q4 to Q4), beginning receivable balances, current sales collected and total cash collected for Q1 to Q4. What is your expected total cash collection in (future) Q4 (in $ million)? 0+ decimals Submit Part 4 18 Attempt 1/10 for 10 pts. Add another worksheet to your spreadsheet and label it "Disbursements." What fraction of each quarter's purchases gets paid during that same quarter? 3+ decimals Attempt 1/10 for 10 pts. Part 5 What fraction of the previous quarter's purchases ends up as the beginning accounts payable balance in each quarter? 2+ decimals Submit Attempt 1/10 for 10 pts. Part 6 Add some rows to the spreadsheet showing sales (Q1 to Q1), purchases (Q4 to Q4), beginning payable balances and current purchases paid for Q1 to Q4. What is your expected payment for current purchases in (future) Q4 (in $ million)? 1+ decimals Submit Attempt 1/10 for 10 pts. Part 7 Add some more rows to the disbursement worksheet showing wages & other expenses, interest payments and capital expenditure and total cash disbursements for Q1 to Q4. What is your expected total cash disbursement in (future) Q4 (in $ million)? 0+ decimals Part 8 1 | Attempt 1/10 for 10 pts. Add another worksheet to your spreadsheet and label it "Cash budget". Add rows for beginning cash balance, cash collections, cash disbursements and ending cash balance for Q1 to Q4. What is your expected cash balance at the end of Q4 (in $ million)? 1+ decimals Submit 1 Attempt 1/10 for 10 pts. Part 9 Company policy is to borrow just enough every quarter to prevent the cash balance from becoming negative. Rename "Ending cash balance" to "Intermediate cash balance" on worksheet "Cash budget" and add two rows for short-term debt issuance and ending cash balance. What is the ending cash balance in Q4 (in $ million)? 1+ decimals Submit Part 10 Attempt 1/10 for 10 pts. The company also has a policy of repaying short-term debt as much as cash flows allow. Insert another row for debt repayment between debt issuance and ending cash balance, and add two rows for beginning debt and ending debt. What is the ending cash balance in Q4 (in $ million)? 0+ decimals Submit