FIN622 Assignment # 2 Solution

Corporate Finance “FIN622”
Assignment No.2
Solution:
A)
March
April
May
June
Forecast sales
Rs. 50000
Rs. 60000
Rs. 40000
Rs. 20000
Cash sales
12000
6000
Collections of A/c receivable
Lagged 1 Month
29400
19600
Lagged 2 Month
10500
12600
Total cash receipts
51900
38200
Less: Cash disbursements
60,000
45,000
Net cash flow
(8,100)
(6,800)
Add: Beginning cash
11,500
3400
Ending cash
3,400
(3,400)
Less: Minimum cash balance
3,000
3,000
Required finances
-----
6,400
Excess cash balance
400
-----
B)
May: We have an Excess amount of Rs. 400
June: We will require additional finance of Rs. 6,400 to meet our expenses.