Question 1 [75 Points] Firm cvs has estimated sales (in millions) for the next four quarters as follows: Sales (in milio

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Question 1 [75 Points]
Firm cvs has estimated sales (in millions) for the next four
quarters as follows:
Sales (in milions)
Q1 Q2 Q3 Q4
70 100 120 130
Sales for the first quarter of the year after this one are
projected at $110 million. Accounts receivable at the beginning of
the year were $23 milion. CVS has a 20,day collection period. CVS's
purchases from suppliers in a quarter are equal to 30 percent of
the next quarter's forecast sales, and suppliers are normally
paidin 20 days. Wages, taxes, and other expenses run about 10
percent of sales. Interest and dividends are $7 milion per
quarter.CVS plans a major capital outlay in the second quarter of
$50 milion. Finally, the company started the year with a $35 milion
cashbalance and wishes to maintain a $25 million minimum balance.
Short term borrowing rate is 5%, short term lending rate is 3%.
a-Prepare cash collection table [ 15 Points]
b- Prepare cash disbursement table [ 15 Points]
c-Prepare cash budget table [ 20 Points]
d-Prepare short-term financial plan. [ 20 Points]
e- What is the amount of cash generated by short-term financing?
[ 5 Points]