4-6A.

Sales
Collections:
Month of sale (10%)
First month (60%)
Second month (30%)
Total Collections
Purchases (60%)
Payments
Receipts
(collections)
Cash Disbursements
Purchases
Rent
Other Expenditures
Tax Deposits
Interest on Short-Term
Borrowing
Total Disbursements
Net Monthly Change
Beginning Cash Balance
Additional Financing
Needed (Repayment)
Ending Cash Balance
Cumulative Borrowing

November
$220,000

The Sharpe Corporation Cash Budget Worksheet

December
January
February
March
April
$175,000
$90,000
$120,000
$135,000 $240,000

72,000

9,000
105,000
66,000
180,000
81,000
72,000

12,000
54,000
52,500
118,500
144,000
81,000

13,500
72,000
27,000
112,500
180,000
144,000

24,000
81,000
36,000
141,000
162,000
180,000

180,000

118,500

112,500

141,000

72,000
10,000
20,000

81,000
10,000
20,000

102,000
$78,000
22,000

111,000
$7,500
100,000

$100,000
0

$107,500
0

144,000
10,000
20,000
22,500

180,000
10,000
20,000

196,500 210,000
($84,000) ($69,000)
107,500
23,500

$23,500
0

60,500
$15,000
$60,500

The firm will definitely have ample cash to repay the $200,000 note payable due in July. The firm should have $222,009 in cas
5-1A. (Compound interest) To what amount will the following investments accumulate?
a. $5,000 invested for 10 years at 10 percent compounded annually
Amount (dollars)
Period (years)
Interest Rate
Future Value

5,000
10
10%
$12,968.71

b. $8,000 invested for 7 years at 8 percent compounded annually

Amount (dollars)
Period (years)
Interest Rate
Future Value

8,000
7
8%
$13,710.59

c. $775 invested for 12 years at 12 percent compounded annually

Amount (dollars)
Period (years)
Interest Rate

775
12
12%

Future Value

$3,019.38

d. $21,000 invested for 5 years at 5 percent compounded annually

Amount (dollars)
Period (years)
Interest Rate
Future Value

21,000
5
5%
$26,801.91

5-4A. (Present value) What is the present value of the following future amounts?
a. $800 to be received 10 years from now discounted back to the present at 10 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

800
10
10%
$308.43

b. $300 to be received 5 years from now discounted back to the present at 5 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

300
5
5%
$235.06

c. $1,000 to be received 8 years from now discounted back to the present at 3 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

1,000
8
3%
$789.41

d. $1,000 to be received 8 years from now discounted back to the present at 20 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

1,000
8
20%
$232.57

5-5A. (Compound annuity) What is the accumulated sum of each of the following streams of
payments?
a. $500 a year for 10 years compounded annually at 5 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

500
10
5%
$6,288.95

b. $100 a year for 5 years compounded annually at 10 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

100
5
10%
$610.51

c. $35 a year for 7 years compounded annually at 7 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

35
7
7%
$302.89

d. $25 a year for 3 years compounded annually at 2 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

25
3
2%
$76.51

5-6A. (Present value of an annuity) What is the present value of the following annuities?
a. $2,500 a year for 10 years discounted back to the present at 7 percent
Amount (dollars)
Period (years)
Interest Rate
Future Value

2,500
8
20%
$9,592.90

b. $70 a year for 3 years discounted back to the present at 3 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

70
3
3%
$198.00

c. $280 a year for 7 years discounted back to the present at 6 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

280
7
6%
$1,563.07

d. $500 a year for 10 years discounted back to the present at 10 percent

Amount (dollars)
Period (years)
Interest Rate
Future Value

500
10
10%
$3,072.28

sheet
May
June
July
August
$300,000 $270,000 $225,000 $150,000
30,000
144,000
40,500
214,500
135,000
162,000

27,000
180,000
72,000
279,000
90,000
135,000

22,500
162,000
90,000
274,500

214,500

279,000

274,500

162,000
10,000
20,000

135,000
10,000
20,000
22,500

90,000
10,000
20,000

605
192,605
$21,895
15,000

$386
187,886 120,000
$91,114 $154,500
15,000
67,509

-21,895
$15,000
$38,605

-38,605
$67,509 $222,009
0
0

90,000

hould have $222,009 in cash by the end of that month.