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

Sales for the fi rst quarter of the year after this one are projected at $170 million.
Accounts receivable at the beginning of the year were $68 million. Wildcat has a 45-day collection period. Wildcat€™s purchases from suppliers in a quarter are equal to 45 percent of the next quarter€™s forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 25 percent of sales. Interest and dividends are $12 million per quarter. Wildcat plans a major capital outlay in the second quarter of $75 million. Finally, the company started the year with a $49 million cash balance and wishes to maintain a $30 million minimum balance.
a. Complete a cash budget for Wildcat by filling in the following:

b. 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. Prepare a short-term financial plan by filling in the following schedule. What is the net cash cost (total interest paid minus total investment income earned) for theyear?

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Q4 601 $160 Q2 $175 Q3 $190 $215 Sales WILDCAT, INC. Cash Budget in millions) Q2 Q3 Q4 $30 Target cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) 30