FIN 370 Week 3 Assignment Precision Machines Part 1
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Precision Machines
is preparing a financial plan for the next six months to determine the
financial needs of the company. The historical analysis of the company’s sales
shows that the company’s total sales are 30% cash sales and 70% credit
sales. Further analysis of credit sales
shows that the company receives 50% of the credit sales one month after the
sale and the remaining 50% in the second month after the sale. This means the
cash collections from sales are 30% in the first month of the sale, 35% in the
second month, and 35% in the third month.
The materials purchased by the company amounts to 50% of the
sales for the month. The company pays
for the purchases one month after the initial purchase. The company likes to
maintain a cash balance of $5,000. The cost of borrowing is 10%. The company plans to pay off the loan
whenever there is a surplus and borrow when there is a deficit.
The attached spreadsheet shows revenues (sales), expenses,
capital expenditures, and other expenses for Precision Machines’ next six
months. Using the information given on
the spreadsheet, prepare a cash budget for January through June and determine
the cash surplus, deficit, and the financing needs of the company.
Review the
Learning Team Assignment due in Week 5.
Create an
outline for the essay.
Develop a
700-word annotated bibliography using at least 3 resources.
Format your
paper consistent with APA guidelines.
Click the
Assignment Files tab to submit your assignment.
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