Download the pdf file FIN3403_CaseStudy_2 and read the requirements of the case study and answer all the questions.
Some of your responses will be submitted in a WORD document you create.
Some of your responses will be submitted using the EXCEL workbook provided (FIN3403_CaseStudy_2_workbook.xlsx)
Respond to the following questions. Written responses must comprise at least three complete sentences, with proper grammar and punctuation. Cite any referenced materials using APA format.
In the Excel spreadsheets provided, all calculations that support your answers must be shown as formulae.
1. Use the numbers given to complete the cash budget and short-term financial plan in Excel. (Sheet 1)
2. Rework the cash budget and short-term financial plan assuming the minimum balance is changed to $100,000 (Sheet 2)
3. You have looked at the credit policy offered by the competition and determined that the industry standard credit policy is 1/19 net 40. The discount will begin to be offered on the first day of the first quarter. You want to examine how this credit policy would affect the cash budget
and short-term financial plan. If this credit policy is implemented, you believe that 40% of all sales will take advantage of it, and the outstanding accounts receivable period will decline to 36 days.
a. Rework the cash budget and short-term financial plan under the new credit policy and a minimum cash balance of $100,000. (Sheet 3)
b. What interest rate are you effectively offering your customers?
4. You have talked to the company’s suppliers about the credit terms that you receive. Currently, the company receives terms of net 45. The suppliers have stated that they would offer new credit terms of 1.5/15, net 40. The discount would begin to be offered on the first day of the first quarter.
a. What interest rate are suppliers offering the company?
b. Rework the cash budget and short-term financial plan assuming you take the offered credit terms on all orders and the minimum cash balance is $100,000. Also assume the company offers the credit terms detailed in Question 3. (Sheet 4)
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