Hi All,
I am taking an online finance class, and was wondering if someone can help me out or point me to an appropriate financial modeling forum.
Question:
There's some company. Given Ending Cash Balance for May. Also given Collections and Payments for June, July, August, Sept, Oct, Nov.
a) How do I calculate the Ending Cash Balance for each month? I thought the formula is:
Ending Cash Balance for May
+ Collection for June
- Disbursement for June
+ Current Borrowing
---------------------------------
= Ending Cash Balance for June
My question is, I do not have Disbursement and also Current Borrowing, so I do I calculate the Ending Cash Balance?
b) If the company must maintain a cash balance of at least X amount, how much will they need to borrow each month? This one is simple and I should know.
c) If the firm must pay 8% annual interest on its short-term borrowing? How des this affect the Ending Cash Balance for each month? I just don't know how to do this one.
d) How would the Ending Cash Balance change if company uses cash excess of the minimum to pay off its short-term borrowing each month?
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