Cash budget, Financial Management

Assignment Help:

We need to have done some exploration work on all of the major projects for inclusion in our prospectus, but of our $4m we need at least $1m in the bank to pay for all the listing expenses and to ensure we have a reasonable amount of cash in case anything goes wrong. This means that $3m can be spent on all activities in the lead up to the listing. We therefore need a cash budget to ensure we spend appropriately what we have. 

Revenue

Our only source of revenue will be the interest on the money in the bank, so please make sure this is well invested - and safely. We will, of course, need this included in the budget.

Costs

Maintaining our Perth office, including paying the accounts clerk, costs about $15,000 per month. Directors' fees total $30,000 per year. Directors normally fly business class to and from Mali and Niger so some flights to and from should be included, as should reasonable hotel, vehicle and meal costs while there. We believe that at least 10 visits, each of at least a week, will be needed between all the directors to adequately oversee operations there.

Conditions in Wiluna will be much better, so our geologist will need to visit three times and one other director only once, also for a week each, over the period. Please include a reasonable estimate of these costs in the budget, and let us know which airline we should be using for each of these. These trips will be spaced out evenly over the next 24 months. The remainder of the money will form our exploration budget, which you do not need to divide up by purpose (that is for our geologist to do), but will start to be spent from October onwards. Keep in mind that working in the Sahara might be seasonal, so the costs are likely to be much lower when we cannot work.


Related Discussions:- Cash budget

Explain about the financial management, Explain about the Financial managem...

Explain about the Financial management Financial management is concerned with efficient use of a significant economic resource (input), namely, capital. It's, so, argued that p

Advanced financial management, QUESTION 1 [25 marks] Xelo Ltd, whose curren...

QUESTION 1 [25 marks] Xelo Ltd, whose current sales consist of fixed operating costs of R140 000 and variable operating costs equal to 22% of sales, has made the following two sale

Nominal interest rate, You have to make a payment of $1,561.39 in 10 years....

You have to make a payment of $1,561.39 in 10 years. To get the money for this payment, you will make 5 equivalent deposits, starting today and for the following 4 quarters, in a b

Lewis model of economic development, Question 1: (i) Critically explai...

Question 1: (i) Critically explain and analyse the Lewis model of economic development. (ii) Compare and contrast the neoclassical growth model and the new growth theory.

International commercial terms or inco terms, I NC O terms You learnt...

I NC O terms You learnt that specifications, delivery period and destination are all dependent  factors   on  a   particular   project.  Let   us  know  about   the internati

Illustrate about the financial management, Illustrate about the Financial M...

Illustrate about the Financial Management Individual businesses face problems dealing with acquisition of funds to carry on their activities and with determination ofoptimum

Forms of dividend, FORMS OF DIVIDEND Cash Dividend Many Companies...

FORMS OF DIVIDEND Cash Dividend Many Companies pay dividend in cash. Often cash dividend may be supplemented by a bonus issue (stock dividend).  When the company chooses

Compare diversifiable and nondiversifiable risk, Compare diversifiable and ...

Compare diversifiable and nondiversifiable risk. Which do you think is more important to financial managers in business firms? Diversifiable risk is able to be dealt with by of

Explain about inventory turnover ratio, Q. Explain about Inventory Turnover...

Q. Explain about Inventory Turnover Ratio ? Inventory Turnover Ratio: - Definite items of inventory are slow moving. It signifies that their consumption is quite slow and capit

Write Your Message!

Captcha
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