Construct a cash budget for a typical month

Assignment Help Finance Basics
Reference no: EM132688939

Tierney Enterprises is constructing its cash budget. Its budgeted monthly sales are $5,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget for a typical month and calculate the average net cash flow during the month.

Reference no: EM132688939

Questions Cloud

What is the expected change in net income : The interest rate on the notes payable is 10%, and the tax rate is 25%. If the firm implements the plan, what is the expected change in net income?
What is alex share of the net income : What is Alex's share of the $450,000 net income? The partnership agreement specifies that Alex and Browning have a salary allowance of $120,000
What is the stock price per share-pennewell publishing inc : Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. PP's
Which circumstances may a stockholder be personally liable : Which circumstances may a stockholder be personally liable? If stock is bought above its stated value. / if stock was bought below its par value
Construct a cash budget for a typical month : Construct a cash budget for a typical month and calculate the average net cash flow during the month.
Find effective annual percentage cost of funds : Noddings Inc. needs to raise more capital because its business is booming. The company purchases supplies on terms of 1/10 net 20, and it currently takes
Prepare a final strategic operational plan proposal : Prepare a final Strategic Operational Plan Proposal (SOPP) based on the scenario given and the SOPP template provided. Incorporate any useful feedback.
What are the potential forensic services : Jenny is a CPA. Jenny is aware that Minuteman Landscaping. What are the potential forensic services that Jenny could perform in the context of the litigation?
What is the gain or loss in inventory value in us dollars : What is the gain or loss in inventory value in U.S. dollars as a result of the change in exchange rates?

Reviews

Write a Review

Finance Basics Questions & Answers

  Estimate the ipo price for detox company

Estimate the IPO price for Detox Company using the MV/Revenues ratio and assuming that they will issue 21M shares.

  Explain how weather derivatives could be used

Explain how weather derivatives could be used by an electric utility to manage the risk associated with power consumption as affected by the weather.

  Should the change in credit terms be made

Assume all operating costs are paid when inventory is sold and that all sales are collected at the DSO.

  Evaluate capital investment project

What types of decisions would need to be made before the investment is made? Indicate the main kinds of information/data needed to evaluate this capital investment project.

  What factors would influence mullet decision

Mullett Technologies is considering whether or not to refund a $75 million, 12% coupon, 30-year bond issue that was sold over 5 years ago. It is amortizing $5 million of flotation costs on the 12% bonds over the issue's 30-year life. Mullet's investm..

  Implement ethics and corporate social responsibility

How can managers and decision makers effectively implement ethics and corporate social responsibility in the strategic vision of an organization?

  A guy borrows 9700 and wants to repay it 750 every six

a guy borrows 9700 and wants to repay it 750 every six months with the first payment in 6 months. if the loan terms are

  Define the roce

Forecasting Return on Common Equity and Residual Earnings (Easy) The following are earnings and dividend forecasts made at the end of 2012 for a firm.

  Global investments-mergers questions

Which of the two long-term financing securities (debt or equity) would potentially maximize shareholder earnings more?

  What conclusions can you draw from this information

You have taken the following information from a firm's financial statements. As an investor in the firm's debt instruments, you are concerned with its liquidity position and its use of financial leverage.

  How can a negative free cash flow be considered good news

What is the relation between EBITDA and cash flow from operations? How can a negative free cash flow be considered good news? How can a positive free cash flow be considered bad news?

  Determining the present value of cash flows

Seaborn Co. has identified an investment project with the following cash flows. If the discount rate is 9 percent, the present value of these cash flows is $ ?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd