& copper color; imagery: Foundations of Financial heed
• Complete the following problem sets:
o Problem P4-20 (Ch. 4)
o Problem P5-2 (Ch. 5)
o Problem P7-3 & P7-20 (Ch. 7)
• Submit the problem sets to your instructor.
2. Individual Assignment: Cash Management Paper
• Prepare a 700- to 1,050-word paper in which you character the following:
o Compare and contrast various capital management techniques.
o Compare and contrast the various methods of short-term financing.
Chapter 4
20. Juan’s Taco Company has restaurants in five college towns. Juan wants to
balloon into Austin and College Station and needs a bank contribute to do this. Mr.
Bryan, the banker, will finance construction if Juan can gratuity an acceptable
three- calendar month financial plan for January through butt. Following are echt and
forecasted bargains figures:
Additional
Actual Forecast Information
November $120,000 January $190,000 April forecast $230,000
December 140,000 February 210,000
March 230,000
Of Juan’s gross sales, 30 pct are for exchange and the remain 70 percent are on
credit.
Of credit sales, 40 percent are stipendiary in the month after sale and 60 percent
are paid in the second month after the sale. Materials cost 20 percent of sales
and are paid for in cash. Labor outgo is 50 percent of sales and is also paid in
the month of sales. Selling and administrative expense is 5 percent of sales and
is also paid in the month of sales. Overhead expense is $12,000 in cash per
month; depreciation expense is $25,000 per month. Taxes of $20,000 and
dividends of $16,000 will be paid in March. Cash at the beginning of January is
$70,000, and the minimum desired cash balance is $65,000.
For January, February, and March, prepare a schedule of monthly cash
receipts, monthly cash payments, and a complete monthly cash compute with
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