Reference no: EM131368054
Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl has frequently run out of cash. This has necessitated late payment on certain orders, which, in turn, is beginning to cause a problem with suppliers. Koehl plans to borrow from the bank to have cash ready as needed, but first she needs a forecast of just how much she must borrow.
Accordingly, she has asked you to prepare a cash budget for the critical period around Christmas, when needs will be especially high.
Sales are made on a cash basis only. Koehl's purchases must be paid for during the following month. Koehl pays herself a salary of $4,800 per month, and the rent is $2,000 per month. In addition, she must make a tax payment of $12,000 in December.
The current cash on hand (on December 1) is $400, but Koehl has agreed to maintain an average bank balance of $6,000-this is her target cash balance. (Disregard till cash, which is insignificant because Koehl keeps only a small amount on hand in order to lessen the chances of robbery.) The estimated sales and purchases for December, January, and February are shown below. Purchases during November amounted to $140,000.
|
Sales
|
Purchases
|
December
|
$ 160,000
|
$ 40,000
|
January
|
40,000
|
40,000
|
February
|
60,000
|
40,000
|
a. Prepare a cash budget for December, January, and February.
b. Now, suppose Koehl were to start selling on a credit basis on December 1, giving customers 30 days to pay. All customers accept these terms, and all other facts in the problem are unchanged. What would the company's loan requirements be at the end of December in this case? (Hint: The calculations required to answer this question are minimal.)
Discuss rewards that encourage individuals to begin careers
: BUS 362- Discuss the motivators/rewards that encourage individuals to begin entrepreneurial careers. What problems might be anticipated if an entrepreneur were to become obsessed with one of these rewards.
|
Departments in terms of productivity
: Discuss how the nurse manager might use benchmarking to compare the unit with other departments in terms of productivity, budgeting, educational activities, and shared governance.
|
What is the expected return on equity
: What is the expected return on equity under each current asset level? - In this problem, we have assumed that the level of expected sales is independent of current asset policy. Is this a valid assumption?
|
What is the decision to be made
: What is the decision to be made, what is the chance event, and what is the consequence? Identify the alternatives for the decisions and the possible outcomes for the chance events?
|
Prepare a cash budget for december and january and february
: Prepare a cash budget for December, January, and February.- What would the company's loan requirements be at the end of December in this case?
|
Some of the reasons for the effects found in these studies
: The following results come from two studies looking at the effect of package size on food intake. The experiments have a 2x2 factorial design with two Package Size conditions and two Consumer Type conditions. Consumer type conditions: In your opinion..
|
Main types of job redesign
: Of the three main types of job redesign (job enlargement, job rotation, job enrichment), which one do you think would be the most effective in your current workplace? Explain your reasoning, and cite Bauer and Erdogan (2012) or Griffin (2007) as p..
|
Split cable advertising experiment and ackerberg
: The “split cable” allowed researchers to expose different consumers, who were watching the same TV show, to different amounts and types of advertising. Why might this approach be preferable to comparing consumers who saw different ads because they wa..
|
Specific group decision-making techniques
: Do a search on YouTube for videos on group decision making or on specific group decision-making techniques discussed in the background materials. Choose a video you found to be very useful at explaining the techniques in the background materials, ..
|