Reference no: EM132904227

Problem - Short-Term Financial Planning - The Itsar Products Company has made the following monthly estimates of cash receipts and cash disbursements when preparing cash budgets for the next 12 months. Itsar Products has beginning cash on hand of $10,000 and wants to maintain this minimum cash level throughout the next year.

MONTH	CASH RECEIPTS	CASH DISBURSEMENTS
January	$100,000	$100,000
February	$90,000	$110,000
March	$80,000	$110,000
April	$100,000	$150,000
May	$120,000	$180,000
June	$160,000	$180,000
July	$200,000	$180,000
August	$250,000	$180,000
September	$250,000	$150,000
October	$200,000	$110,000
November	$140,000	$100,000
December	$100,000	$100,000

Required -

A. Determine whether Itsar Products will have a cash need during the next year.

B. If Itsar Products has a cash need, indicate the month when the need will begin and determine the month and amount when the maximum need will occur.

C. Determine whether the cash need (if any) can be repaid within the next year.