Short Term Financial Management

Short Term Fin" rel="nofollow">inancial Management Paper details: See Assignment details Week 5 Group Project Assignment Description Please read the relevant parts of your textbook, which refer to cash flow and fin" rel="nofollow">inancial plannin" rel="nofollow">ing. To avoid any uncertain" rel="nofollow">inty regardin" rel="nofollow">ing his busin" rel="nofollow">iness' fin" rel="nofollow">inancin" rel="nofollow">ing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturin" rel="nofollow">ing (CBM). He has estimated the followin" rel="nofollow">ing sales forecast for CBM over the next 9 months: March $100,000 April $275,000 May $320,000 June $450,000 July $700,000 August $700,000 September $825,000 October $500,000 November $115,000 He has also gathered the followin" rel="nofollow">ing collection estimates regardin" rel="nofollow">ing the forecast sales: Payment collection within" rel="nofollow">in the month of sale = 25% Payment collection the month followin" rel="nofollow">ing sales = 55% Payment collection the second month followin" rel="nofollow">ing sales = 20% Payments for direct manufacturin" rel="nofollow">ing costs like raw materials and labor are made durin" rel="nofollow">ing the month that follows the one in" rel="nofollow">in which such costs have been in" rel="nofollow">incurred. These costs are estimated as follows: March $187,500 April $206,250 May $375,000 June $337,500 July $431,250 August $640,000 September $395,000 October $425,000 Additional fin" rel="nofollow">inancial in" rel="nofollow">information is as follows: Admin" rel="nofollow">inistrative salaries will approximately amount to $35,000 a month. Lease payments around $15,000 a month. Depreciation charges, $15,000 a month. A one­time new plant in" rel="nofollow">investment in" rel="nofollow">in the amount of $95,000 is expected to be in" rel="nofollow">incurred and paid in" rel="nofollow">in June. Income tax payments estimated to be around $55,000 will be due in" rel="nofollow">in both June and September. And fin" rel="nofollow">inally, miscellaneous costs are estimated to be around $10,000 a month. Cash on hand on March 1 will be around $50,000, and a min" rel="nofollow">inimum cash balance of $50,000 shall be on hand at all times. To receive fullÕÉ≠†Њ† credit on this assignment, please show all work, in" rel="nofollow">includin" rel="nofollow">ing formulas and calculations used to arrive at the fin" rel="nofollow">inancial values. Group Project Guidelin" rel="nofollow">ines As a group, prepare a monthly cash budget for Cyrus Brown Manufacturin" rel="nofollow">ing for the 9­month period of March through November. oUse Excel to prepare the monthly cash budget. Based on your cash budget fin" rel="nofollow">indin" rel="nofollow">ings, answer the followin" rel="nofollow">ing questions: oWill the company need any outside fin" rel="nofollow">inancin" rel="nofollow">ing? oWhat is the min" rel="nofollow">inimum lin" rel="nofollow">ine of credit that CBM will need? oWhat do you thin" rel="nofollow">ink of CBM's cash position durin" rel="nofollow">ing the budget period? Do you see any concerns for the company in" rel="nofollow">in this regard? oIf you were a bank manager, would you want CBM as your client? Why or why not? It is up to the members of the group to divide the assignment tasks evenly. You will be graded on group participation