Hampton Machine Tool Case Solution
January
Sales -Advances 2265.000 Entire Credit 1933.500 sales for November 600.000 400.000
948.000 400.000 181.000 15.000
600.000 400.000
600.000 400.000 350.000 20.250
600.000 400.000 181.000 20.250 1350.000 150.000 2701.250 765.750 -331.500
15.000
1544.000 1559.000 699.000
1015.000 699.000 1007.000
1370.250 1007.000 765.750
1000.000 -331.500 933.500
Negative balance due to loans and dividend.
CASH BUDGET for HAMPTON MACHINE TOOL(000 $) Early Repayment September October Receipts: A/R Collection(assumes 30-day;Oct& Nov. less advances of $840 and $726, respectively) Bank Loan Total Cash Inflow Expenditures: A/P Payment(paid in 30 days) Other Op. Outlays CAPEX Taxes Interest Loan Principal Dividends Total Cash Outflow Beginning Cash ENDING CASH
684.000 2243.000
1323.000 1822.000
948.000 400.000 181.000 15.000 200.000 1744.000 1559.000 499.000
600.000 400.000
12.000 100.000 1112.000 499.000 710.000
TOOL(000 $) Early Repayment November December
January
779.000 350.000 1839.000
1604.000 2077.250
2265.000 1945.500
600.000 400.000 350.000 15.750
600.000 400.000 181.000 15.750 1050.000 150.000 2396.750 473.250 -319.500
600.000 400.000
Sales -Advances = 2163 - 840 Entire Credit sales for November
1365.750 710.000 473.250
1000.000 -319.500 945.500
Negative balance even after early repayment of principal.
CASH BUDGET for HAMPTON MACHINE TOOL(000 $) Early Repayment without divid September October Receipts: A/R Collection(assumes 30-day;Oct& Nov. less advances of $840 and $726, respectively) Bank Loan Total Cash Inflow Expenditures: A/P Payment(paid in 30 days) Other Op. Outlays CAPITAL EXPENDITURE Taxes Interest Loan Principal Dividends Total Cash Outflow Beginning Cash Net Monthly Cash Flow ENDING CASH
684.000 2243.000
1323.000 1822.000
948.000 400.000 181.000 15.000 200.000 1744.000 1559.000 499.000
600.000 400.000
12.000 100.000 1112.000 499.000 710.000
$) Early Repayment without dividends November December
January
779.000 350.000 1839.000
1604.000 2077.250
2265.000 2095.500
Sales Advances Entire Credit sales for November
600.000 400.000 350.000 15.750
600.000 400.000 181.000 15.750 1050.000 2246.750 473.250 -169.500
600.000 400.000
5.250 200.000 1205.250 -169.500 890.250
1365.750 710.000 473.250
Negative balance even after early repayment of principal without
CASH BUDGET for HAMPTON MACHINE TOOL(000 $) extended Repayment with divid September October Receipts: A/R Collection(assumes 30-day;Oct& Nov. less advances of $840 and $726, respectively) Bank Loan Total Cash Inflow Expenditures: A/P Payment(paid in 30 days) Other Op. Outlays CAPITAL EXPENDITURE Taxes Interest Loan Principal Dividends Total Cash Outflow Beginning Cash Net Monthly Cash Flow ENDING CASH
684.000 2243.000
1323.000 2022.000
948.000 400.000 181.000 15.000
600.000 400.000
15.000
1544.000 1559.000 699.000
1015.000 699.000 1007.000
$) extended Repayment with dividends November December January
779.000 350.000 2136.000
1604.000 2369.750
Sales 2265.000 Advances
2283.500
600.000 400.000 350.000 20.250
600.000 400.000 181.000 20.250 1000.000 150.000 2351.250 765.750 18.500
600.000 400.000
Entire Credit sales for November
5.250 350.000 1355.250 18.500 928.250
1370.250 1007.000 765.750
Finally a positive balance due to delay in repayment of $350,000.
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