Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows:

	Q1	Q2	Q3	Q4
Sales	$ 105	$ 125	$ 145	$ 175

Sales for the first quarter of the following year are projected at $120 million. Accounts receivable at the beginning of the year were $47 million. Wildcat has a 45-day collection period.

Wildcats purchases from suppliers in a quarter are equal to 45 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 $11 million per quarter.

Wildcat plans a major capital outlay in the second quarter of $60 million. Finally, the company started the year with a $66 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. (Enter your answers in millions. Negative amounts should be indicated by a m

What is the net cash cost for the year under this target cash balance?

Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million

What is the net cash cost for the year under this target cash balance?

\begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ WILDCAT, INCORPORATED } \\ \hline \multicolumn{7}{|c|}{ Short-Term Financial Plan } \\ \hline \multicolumn{7}{|c|}{ (in millions) } \\ \hline & & Q1 & & Q2 & Q3 & Q4 \\ \hline Target cash balance & $ & 40.00 & $ & 40.00 & 40.00 & 40.00 \\ \hline Net cash inflow & & 4.35x & & 55.15 & 7.15x & 32.60 \\ \hline New short-term investments & & 26.00 & & 4.87 & 0.00x & 0.09 \\ \hline Income on short-term investments & & 0.52 & & 0.06 & 0.00 & 0.00 \\ \hline Short-term investments sold & & 0.00 & & 0.00 & 30.87x & 0.00 \\ \hline New short-term borrowing & & 0.00 & & 0.00 & 69.09x & 0.00 \\ \hline Interest on short-term borrowing & & 0.00 & & 0.00 & 2.07 & 0.00 \\ \hline Short-term borrowing repaid & & 0.00 & & 0.00 & 0.00x & 69.09 \\ \hline Ending cash balance & $ & 44.87 & $ & (59.96)X & 109.18x & (36.58) \\ \hline Minimum cash balance & & -40.00 & & -40.00 & -40.00 & -40.00 \\ \hline \multicolumn{7}{|l|}{ Cumulative surplus (deficit) } \\ \hline \multicolumn{7}{|l|}{ Beginning short-term investments } \\ \hline \multicolumn{7}{|l|}{ Ending short-term investments } \\ \hline \multicolumn{7}{|l|}{ Beginning short-term debt } \\ \hline Ending short-term debt & & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ WILDCAT, INCORPORATED } \\ \hline \multicolumn{6}{|c|}{ Short-Term Financial Plan } \\ \hline \multicolumn{6}{|c|}{ (in millions) } \\ \hline & & Q1 & Q2 & Q3 & Q4 \\ \hline Target cash balance & $ & 20.00 & 20.00 & 20.00 & 20.00 \\ \hline Net cash inflow & & 80.85x & & & \\ \hline \multicolumn{6}{|l|}{ New short-term investments } \\ \hline \multicolumn{6}{|l|}{ Income on short-term investments } \\ \hline \multicolumn{6}{|l|}{ Short-term investments sold } \\ \hline \multicolumn{6}{|l|}{ New short-term borrowing } \\ \hline \multicolumn{6}{|l|}{ Interest on short-term borrowing } \\ \hline \multicolumn{6}{|l|}{ Short-term borrowing repaid } \\ \hline \multicolumn{6}{|l|}{ Ending cash balance } \\ \hline Minimum cash balance & & -20.00 & -20.00 & -20.00 & -20.00 \\ \hline \multicolumn{6}{|l|}{ Cumulative surplus (deficit) } \\ \hline \multicolumn{6}{|l|}{ Beginning short-term investments } \\ \hline \multicolumn{6}{|l|}{ Ending short-term investments } \\ \hline \multicolumn{6}{|l|}{ Beginning short-term debt } \\ \hline Ending short-term debt & & & & & \\ \hline \end{tabular}