university of southern california Operations And Supply Chain Management Assignment Help - Cash flow analysis

Question - Cash flow analysis, chapter appendix. (CMA, adapted) TabComp, Inc., is a retail distributor for MZB-
33 computer hardware and related software and support services. TabComp prepares annual sales
forecasts of which the first six months for 2009 are presented here.
Cash sales account for 25% of TabComp’s total sales, 30% of the total sales are paid by bank credit
card, and the remaining 45% are on open account (TabComp’s own charge accounts). The cash
sales and cash from bank credit-card sales are received in the month of the sale. Bank credit-card
sales are subject to a 4% discount deducted at the time of the daily deposit. The cash receipts for
sales on open account are 70% in the month following the sale and 28% in the ...Read More second month after
the sale. The remaining accounts receivable are estimated to be uncollectible.
TabComp’s month-end inventory requirements for computer hardware units are 30% of the next
month’s sales. A one-month lead time is required for delivery from the manufacturer. Thus, orders for
computer hardware units are placed on the 25th of each month to assure that they will be in the store
by the first day of the month needed. The computer hardware units are purchased under terms of
n/45 (payment in full within 45 days of invoice), measured from the time the units are delivered to
TabComp. TabComp’s purchase price for the computer units is 60% of the selling price.

1. Calculate the cash that TabComp, Inc., can expect to collect during April 2009. Be sure to show all
of your calculations.
2. TabComp, Inc., is determining how many MZB-33 computer hardware units to order on January 25,
2009. a. Determine the projected number of computer hardware units that will be ordered.
b. Calculate the dollar amount of the order that TabComp will place for these computer hardware
units.
3. As part of the annual budget process, TabComp prepares a cash budget by month for the entire
year. Explain why a company such as TabComp prepares a cash budget by month for the entireyear. ...Read Less

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