finance help needed

Paymore Products places orders for goods equal to 80% of its sales forecast in the next quarter. The sales forecasts for the next five quarters are as follows:

  Quarter in Coming Year

  Following Year

    First  Second  Third  Fourth    First Quarter  Sales forecast$550  $540  $520  $560   $560        

 

The firm pays for its goods with a 1-month delay. Therefore, on average, three-fourths of purchases are paid for in the quarter that they are purchased, and one-fourth are paid in the following quarter.

 

Paymore’s customers pay their bills with a 2-month delay. Therefore, on average, two-fourths of sales are collected in the quarter that they are sold, and two-fourths are collected in the following quarter. Assume that sales in the last quarter of the previous year were $520.

 

Paymore’s labor and administrative expenses are $60 per quarter and that interest on long-term debt is $58 per quarter.

 

Suppose that Paymore’s cash balance at the start of the first quarter is $35 and its minimum acceptable cash balance is $60. Work out the short-term financing requirements for the firm in the coming year. The firm pays no dividends. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

  Quarter

        First      Second      Third      Fourth  Sources of cash      Cash at start of period$ [removed]  $ [removed]  $ [removed]  $ [removed]    Net cash inflow[removed]  [removed]  [removed]  [removed]     Cash at end of period[removed]  [removed]  [removed]  $ [removed]    Minimum operating cash balance[removed]  [removed]  [removed]  [removed]     Cumulative financing required$ [removed]  $ [removed]  $ [removed]  $ 

 

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