Voice Sensitivity Editor iCover Inc. A group of four UNM students decide to launch an iPhone cover company - iCover. These covers have strong lateral tension that almost doubles the force required to bend the iPhone. Company will outsource manufacturing to a diverse manufacturing firm- iMake, and sell the covers online. There are two main options for distributing the covers: 1) Walmart.com 2) Amazon.com On average, Amazon and Walmart.com will charge fees equivalent of 10% of the sales. Customer will buy the product on one of these websites for a fixed price of $30. Goods posted for sale or both the websites are sold within a month of posting. Amazon will remit payments to the seller account in 60 days. While Walmart.com will remit payments in 30 days. IMake manufacturer of the covers will produce covers according to the following sales schedule. Projected Unit Sales 2021 (,000) January February March April May June 10 20 50 100 100 100 100 100 100 100 10X 100 July August September October November December Editor COGS is 50% of the sales. You are planning to contact with the supplier to make payment 30 days after delivery. The company will stop operations at end of one year. Questions for Analysis 1) For each distributor, calculate the cash balance (Total inflows of cash-Total outflows of cash) for each month for next one year. In the course video I show you the analysis for Amazon. Replicate the analysis for Walmart. Remember the only difference between the two is the extra month of accounts receivable. 2) Calculate the maximum cash shortfall? 3) Compare the two options Walmart vs. Amazon and explain why there is difference between the two. 4) Calculate the maximum cash shortfall for Amazon option if your supplier demands cash on delivery. This will reduce your Accounts payable from 30 days to zero. Hint: Draw a timeline first. In finance, we commonly use end of the period to denote time. Hence Jan 2021 implies end of Jan 2021. Feb 2021 Jan 2021 Dec 2020 For Walmart: Manufacturer delivers and the goods are posted on the website for sale. Mar 2021 Walmart pays Cover Goods are sold and at end of the month Walmart recognizes the sales and takes 10% commission. Rest of the amount will be paid to Gover after 30days. Cover pays the manufacturer