Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 195 $ 215 $ 235 $ 265 Sales for the first quarter of the following year are projected at $210 million. Accounts receivable at the beginning of the year were $83 million. Wildcat has a 45-day collection period. Wildcats purchases from suppliers in a quarter are equal to 50 percent of the next quarters forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $18 million per quarter. Wildcat plans a major capital outlay in the second quarter of $98 million. Finally, the company started the year with a $84 million cash balance and wishes to maintain a $40 million minimum balance.

A-1 Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat.

Please could you show me how to calculate the errors from above table? Thank you.

Answer is complete but not entirely correct. WILDCAT, INC. Short-Term Financial Plan (in millions) Q1 Q2 Q3 Q4 $ 40.00 $ 40.00 $ $ 40.00 $ 40.00 20.00 -67.50 33.50 63.00 64.00 X 0.00 63.62 % 31.21 % 0.05 > 0.88 1.34 X 0.79 0.00 64.16 0.00 201.71 Target cash balance Net cash inflow New short-term investments Income on short-term investments Short-term investments sold New short-term borrowing Interest on short-term borrowing Short-term borrowing repaid Ending cash balance Minimum cash balance Cumulative surplus (deficit) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 % 0.00 40.00 $ 0.00 $ 40.00 $ 40.00 $ 40.00 -40.00 -40.00 -40.00 -40.00 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ Beginning short-term investments Ending short-term investments Beginning short-term debt Ending short-term debt 44.00 $ 66.88 X $ 0.00 $ 0.00 $ 66.88 $ 2.72 X $ 0.00 $ 0.00 $ 2.72 $ 39.27 % 39.27 $ (162.44) 0.00 $ 0.00 0.00 $ $ $ 0.00 Answer is complete but not entirely correct. WILDCAT, INC. Short-Term Financial Plan (in millions) Q1 Q2 Q3 Q4 $ 40.00 $ 40.00 $ $ 40.00 $ 40.00 20.00 -67.50 33.50 63.00 64.00 X 0.00 63.62 % 31.21 % 0.05 > 0.88 1.34 X 0.79 0.00 64.16 0.00 201.71 Target cash balance Net cash inflow New short-term investments Income on short-term investments Short-term investments sold New short-term borrowing Interest on short-term borrowing Short-term borrowing repaid Ending cash balance Minimum cash balance Cumulative surplus (deficit) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 % 0.00 40.00 $ 0.00 $ 40.00 $ 40.00 $ 40.00 -40.00 -40.00 -40.00 -40.00 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ Beginning short-term investments Ending short-term investments Beginning short-term debt Ending short-term debt 44.00 $ 66.88 X $ 0.00 $ 0.00 $ 66.88 $ 2.72 X $ 0.00 $ 0.00 $ 2.72 $ 39.27 % 39.27 $ (162.44) 0.00 $ 0.00 0.00 $ $ $ 0.00