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Paymore Products places orders for goods equal to 80% of its sales forecast in the next quarter. The sales forecasts for the next five quarters are as follows:


  Quarter in Coming Year


  Following Year


    First   Second   Third   Fourth      First Quarter
  Sales forecast $550   $540   $520   $560     $560        


The firm pays for its goods with a 1 month delay. Therefore, on average, three fourths of purchases are paid for in the quarter that they are purchased, and one fourth are paid in the following quarter.


Paymore’s customers pay their bills with a 2 month delay. Therefore, on average, two fourths of sales are collected in the quarter that they are sold, and two fourths are collected in the following quarter. Assume that sales in the last quarter of the previous year were $520.


Paymore’s labor and administrative expenses are $60 per quarter and that interest on long term debt is $58 per quarter.


Suppose that Paymore’s cash balance at the start of the first quarter is $35 and its minimum acceptable cash balance is $60. Work out the short term financing requirements for the firm in the coming year. The firm pays no dividends. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)




        First       Second       Third       Fourth
  Sources of cash        
  Cash at start of period $ [removed]   $ [removed]   $ [removed]   $ [removed]  
  Net cash inflow [removed]   [removed]   [removed]   [removed]  

  Cash at end of period [removed]   [removed]   [removed]   $ [removed]  
  Minimum operating cash balance [removed]   [removed]   [removed]   [removed]  

  Cumulative financing required $ [removed]   $ [removed]   $ [removed]  
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