1. 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
- Divide the firm's monthly total funds requirement (total assets) into a permanent and a seasonal component.
- Find the monthly average (1) permanent and (2) seasonal funds requirements using your findings in 1.