Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You've collected the following forecasts of working capital needs for next year. (in $ million) Cash Accounts receivable Inventory Accounts payable Q1 Q2 Q3 Q4
You've collected the following forecasts of working capital needs for next year. (in $ million) Cash Accounts receivable Inventory Accounts payable Q1 Q2 Q3 Q4 2 2 2 2 19 10 12 19 10 5 10 14 6 4 7 12 Part 1 Attempt 5/5 for 0 pts. What are the permanent working capital needs (in $ million)? Correct Net working capital needs in each quarter are the sum of cash, accounts receivable and inventory, minus accounts payable: (in $ million) Cash Accounts receivable Inventory Accounts payable Net working capital Q1 Q2 Q3 Q4 2 2 2 2 19 10 12 19 10 5 10 14 6 4 7 12 25 13 17 23 The permanent working capital needs are the minimum of the four net working capital numbers: min(25, 13, 17, 23) = 13 Part 2 Attempt 2/5 for 8 pts. What are the temporary working capital needs in Q4 (in $ million)? No decimals Submit Part 3 - Attempt 1/5 for 10 pts. According to the matching principle, how much of your working capital needs should you finance with long-term sources of funds in $ million)? No decimals Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started