Submitted by: Submitted by caroline2013
Views: 646
Words: 690
Pages: 3
Category: Business and Industry
Date Submitted: 04/23/2013 01:47 PM
Permanent versus seasonal funds requirements. Manchester Industries’ current, fixed, and total assets for each month of the coming year are summarized in the following table.
Month Current Fixed Total assets
assets assets [(1) + ( 2 )]
( 1 ) ( 2 ) ( 3 )
January $ 15,000 $ 30,000 $ 45,000
February 22,000 30,000 52,000
March 30,000 30,000 60,000
April 18,000 30,000 48,000
May 10,000 30,000 40,000
June 6,000 30,000 36,000
July 9,000 30,000 39,000
August 9,000 30,000 39,000
September 15,000 30,000 45,000
October 20,000 30,000 50,000
November 22,000 30,000 52,000
December 20,000 30,000 50,000
a. Divide the firm’s monthly total funds requirement (total assets) into a permanent and a seasonal component.
b. Find the monthly average (1) permanent and (2) seasonal funds requirements using your findings in a.
a)
Month Total funds requirements Permanent Requirements Seasonal Requirements
January 45,000 36,000 9,000
February 52,000 36,000 16,000
March 60,000 36,000 24,000
April 48,000 36,000 12,000
May 40,000 36,000 4,000
June 36,000 36,000 0
July 39,000 36,000 3,000
August 39,000 36,000 3,000
September 45,000 36,000 9,000
October 50,000 36,000 14,000
November 52,000 36,000 16,000
December 50,000 36,000 14,000
Monthly average 432,000 124,000
b)
Permanent component...