Agarwal, Incorporated, has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which iswhat the company currently has on hand. The company currently has a receivables balance of $192 million and has developed thefollowing sales and cash disbursement budgets (in millions):SalesQ1$ 405Q2$ 477Q3$ 558Total cash disbursement279415652Q4$ 522434edComplete the following cash budget for the company.Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers inmillions rounded to the nearest whole million dollar amount, e.g., 32.AGARWAL, INCORPORATEDCash Budget(in millions)Q1Q2Q3Q4Beginning receivables192225 $265$310SalesCash collections405477558522372437513542Ending receivablesEA$225265$310$290Total cash collections$372437$513$542Total cash disbursements279415652434Net cash inflow$93$22$139 × $108Beginning cash balance35$128GA$150$11Net cash inflow9322139 ×108Ending cash balance$35 ×35 × $35 × $35 ×Minimum cash balanceᏌᏊ$35 × $35 × $35 × $35Cumulative surplus (deficit)$93115$24 × $84

The average collection period is the amount of time it takes for a business to receive payments owed…

Answered: Agarwal, Incorporated, has a 50-day…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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2 Agarwal, Incorporated, has a 32-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $245 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow 01 $ 400 332 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Ending cash balance Minimum cash balance Cumulative surplus (deficit) 02 $502 443 Q1 03 $ 608 779 AGARWAL, INCORPORATED Cash Budget (in millions) 400 04 $ 568 471 332 Q2 502 443 Q3 608 779 Q4 568 471
Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which is what the company currently has on hand. The company currently has a receivables balance of $189 million and has developed the following sales and cash disbursement budgets (in millions): Q2 Sales $450 Total cash disbursement 268 390 Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q1 $378 Complete the following cash budget for the company. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32.) + Q3 Q4 $531 $495 412 617 Q1 HURZDAN, INC. Cash Budget (in millions) 378 268 Q2 450 390 Q3 531 617 Q4 495 412
es Agarwal, Incorporated, has a 50-day average collection period and wants to maintain a minimum cash balance of $40 million, which is what the company currently has on hand. The company currently has a receivables balance of $198 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Q1 $ 459 302 Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q2 $531 466 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32. Q1 Q3 $ 612 720 AGARWAL, INCORPORATED Cash Budget (in millions) 459 Q4 $576 477 302 Q2 531 466 Q3 612 720 Q4 576 477
Agarwal, Incorporated, has a 32-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $245 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow 01 $ 400 332 Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) 02 $ 502 443 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Q1 Q3 $ 608 779 AGARWAL, INCORPORATED Cash Budget (in millions) 400 04 $ 568 471 332 Q2 502 443 Q3 608 779 Q4 568 471
Agarwal, Incorporated, has a 30-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $187 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Q1 $360 320 Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q2 $ 432 388 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32. $ Q1 Q3 $513 617 AGARWAL, INCORPORATED Cash Budget (in millions) 187 360 Q4 $ 477 391 320 Q2 432 388 Q3 513 617 Q4 477 391
The XYZ customer service branch maintains a disbursement account which is funded by the main office. The branch needs funds for daily disbursements of P40,000 and a minimum balance of P20,000. The cost to transfer funds from the main office to the branch averages P300. The return on money marketable securities is 5%. If the entity uses a 250-day year for financial analysis, how much is the optimal cash amount to be requested by the branch each time?
The financial manager of Sarap Corporation wants to determine the amount of cash outlays to be spent for the nextperiod. He asked the help of the accountant and the latter provided a cash budget for the next year. According tothe computations, the company would be incurring cash expenses of P6,612,500 per month. The financial managerhas estimated a cost of P40 per transaction in case non-cash asset is converted to cash. The firm’s opportunity costratio is 12%.a. The optimum cash balance is?b. The average cash balance is?c. the number of conversion made during the year is?d. The total cash cost is?
Agarwal, Incorporated, has a 40-day average collection period and wants to maintain a minimum cash balance of $30 million, which is what the company currently has on hand. The company currently has a receivables balance of $200 million and has developed the following sales and cash disbursement budgets (in millions): Q1 Q2 $ 477 $ 549 Total cash disbursement 349 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32. Sales 491 Q3 $ 630 754 Q4 $ 594 488
Striker Company estimates its expected cash receipts for the period to be $80,000 and its expected cash disbursements to be $70,000. The beginning cash balance for the period was $5,000. The management wants to maintain a minimum cash balance of $40,000. Knowledge Check 01 How much cash will the company need to borrow? O $15,000 O $25,000 O $30,000 O $40,000
The financial manager of Sarap Corporation wants to determine the amount of cash atlays to be spent for the next period. He asked the help of the accountant and the lattes provided a cash budget for the next year According to the computation, the company would be incurring cash expenses of P6,612,500 per month. The financial manager has estimated a cost of P40 per transaction in case non-cash asset is converted to cash. The firm's opportunity cost ratio is 12% a) the optimum cash tufence is? b) The average cash balance is? c) the number of conversion made during the year? d) The total cash cost is? Please help me with these. Thank youuuu!
Cash Management. A firm maintains a separateaccount for cash disbursements. Total disbursementsare $100,000 per month, spread evenly over the month.Administrative and transaction costs of transferringcash to the disbursement account are $10 per transfer.Marketable securities yield 1% per month. Determinethe size and number of transfers that will minimizethe cost of maintaining the special account. (LO4)
(Short-Term Finance and Planning) You are hired as a financial manager and your first task is to establish the cash budget of your firm. You gathered the following information. The firm receives all income from sales Sales estimates (in millions) Q1 = 1,000; Q2 = 1,250; Q3 = 1,500; Q4 = 2,000; Q1 next year = 1,200 Accounts receivable Beginning receivables = $3000 Average collection period = 45 days Accounts payable Purchases = 60% of next quarter’s sales Beginning payables = 1,200 Accounts payable period is 45 days Other expenses Wages, taxes, and other expense are 25% of sales Interest and dividend payments are $100 A major capital expenditure of $500 is expected in the second quarter The initial cash balance is $100 and the company maintains a minimum balance of $50

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