1. Forecasting Payments. Calculate Paymore's cash payments to its suppliers under the assumption that the firm pays for its goods with a 1-month delay. Therefore, on average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter.
2. Forecasting Collections. Now suppose that Paymore's customers pay their bills with a 2-month delay. What is the forecast for Paymore's cash receipts in each quarter of the coming year? Assume that sales in the last quarter of the previous year were $336.
3. Forecasting Net Cash Flow. Assuming that Paymore's labor and administrative expenses are $65 per quarter and that interest on long-term debt is $40 per quarter, work out the net cash inflow for Paymore for the coming year using a table like Table 19-6, Panel B.