College Custom Essay on Finance

**The assignment deliverables should include an excel file with the work done as per the problem AND a paper – short (approx. 2 pages) that 1) answers the questions posed in the problem, 2) tells us what questions this analysis helps with and 3) shares the lessons learned doing the problem. (be sure to include an intro and conclusion). **
Questions

1. Lakewood Laser SkinCare’s ending cash balance as of January 31, 2012

(the end of its fiscal year 2011) was $10,000. Its expected cash collections
and payments for the next six months are given in the following table.
Month Collections Payments
February              $16,500 $19,400
March                   18,300                   20,800
April                       22,700                   21,600
May                       29,100                   24,300
June                      32,500                   26,700
July                        36,000                   27,200

1. Calculate the firm’s expected ending cash balance for each month.
2. Assuming that the firm must maintain an ending cash balance of at

least $9,000, how much must they borrow during each month?

1. If the firm must pay 5% annual interest on its short-term borrowing,

how does this affect your ending cash balance calculations?

1. Finally, how would your ending cash balance change if the firm uses

any cash in excess of the minimum to pay off its short-term borrowing
in each month?

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