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1- The ABC Corporation’s budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount. The remaining 60% pay in the month following the sale and don’t receive a discount. ABC’s bad debts are very small and are excluded from this analysis. Purchases for next month’s sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month. Construct a single month’s cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation?2-Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?Last year’s accounts payable $50,000 Last year’s notes payable $15,000 Last year’s accruals $20,000 Target payout ratio 25%3- Desai Inc. has the following data, in thousands. Assuming a 365-day year, what is the firm’s cash conversion cycle?Annual sales = $45,000 Annual cost of goods sold = $30,000 Inventory =$4,500 Accounts receivable = $1,800 Accounts payable = $2,500
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