Hey :) can you please solve this. Thank you! For the drop box the answers that a
ID: 2737573 • Letter: H
Question
Hey :) can you please solve this. Thank you!
For the drop box the answers that are given is
A.) -154 Million, -147 Million, -141 Million, -995 Million
B.) -265 million, -1401 million, -118 million, -1260 million
C.) -132 million, -112 million, -66 million, -92 million
D.) -1415 million, -849 million, -991 million, -708 million
The cash budget is considered the primary forecasting tool when firms try to estimate their cash flows and figure out if they are likely to need additional cash flows or to generate surplus cash. Consider the case of Mooney Equipment: Mooney Equipment is putting together its cash budget for the following year and has forecasted expected cash collections over the next five quarters (one year plus the first quarter of the next year). The cash collection estimates are based on sales projections and expected collection of receivables. The sales and cash collection estimates are shown in the following table (in millions of dollars): Q1 Q3 Q4 Sales $1,210 $1,510 $1,560 $1,360 $1,610 Total cash collections $1,210 $1,260 $1,310 $1,310 You also have the following information about Mooney Equipment: In any given period, Mooney's purchases from suppliers generally account for 72% of the expected sales in the next period, and wages, supplies, and taxes are expected to be 15% of next period's sales. In the third quarter, Mooney expects to expand one of its plants, which will require an additional $1,072 million investment. Every quarter, Mooney pays $50 million in interest and dividend payments to long-term debt and equity investors Mooney prefers to keep a minimum target cash balance of at least $14 million at all times.Explanation / Answer
Q1 Q2 Q3 Q4 Q5 Sales 1210 1510 1560 1360 1610 Cash Collections 1210 1260 1310 1310 Purchases -1087 -1123.2 -979.2 -1159.2 Wages, Supply Taxes -226.5 -234 -204 -241.5 Additional Investment -1072 Interest & Dividend -50 -50 -50 -50 Total Cash Available -153.7 Cash Flow in Quarter 4 -140.7