Jana and Cindy are planning to launch UP-PACK, a business that upcycles disposable masks into high quality packaging material. They think it can be a viable business but they need your advice; they want to make sure they aren't taking too big of a risk. Use the information below to create a 6 month cash budget. Based on their research of the industry, they plan to provide credit terms to their customers of 35% payment during the month of sale and 65% payment in the month following sale. Manufacturing supply costs are relatively low since they can get free used disposable masks from health care facilities but there are costs incurred to clean and upcycle the masks. They project their costs of goods sold (COGS) to be 24% of each month's sales. They anticipate having to pay 60% of these costs in the month of purchase and 40% in the month following purchase. Fortunately, Jana's brother has a large empty garage that they can operate in for the first year which saves them from renting space. They are going to contribute to his utility costs as listed in the chart below. Because they are selling to businesses, their marketing budget is largely allocated to personal selling (reflected in payroll costs). Jana and Cindy have $5,500 set aside as their beginning cash balance. Going forward, they do not want their cash balance to go below $3,000. Because they have strong personal credit histories and other sources of household income from their respective partners, they have been approved for a bank line of credit at a rate of 6%. If they need to use this line of credit, they will pay interest in the month following borrowing. Once they have a cash surplus, they will pay down as much of the outstanding line of credit as possible. Round all amounts up to the nearest dollar when preparing the cash budget and then answer the multiple choice questions below by entering the correct answer letter into the associated text box. Provide ONLY the letter of the correct answer for each one (not the answer itself, or any punctuation marks) \begin{tabular}{|l|l|l|l|l|l|l|} \hline & JAN & FEB & MAR & APR & MAY & JUNE \\ \hline Sales & 12500 & 14000 & 18000 & 18000 & 20000 & 26000 \\ \hline Payroll & 8400 & 8400 & 8400 & 8400 & 8400 & 8400 \\ \hline Utilities & 500 & 500 & 500 & 500 & 500 & 500 \\ \hline Insurance & 375 & 375 & 375 & 375 & 375 & 375 \\ \hline Website & 125 & 125 & 125 & 125 & 125 & 125 \\ \hline Businesslicense & 300 & & & & & \\ \hline EquipmentLease & 2200 & 2200 & 2200 & 2200 & 2200 & 2200 \\ \hline StartupCosts & 3000 & & & & & \\ \hline \end{tabular} Cash Budget Q1 Total Receipts for February are: a) $14,000 b) $4,900 c) $8,125 d) $13,025 A Cash Budget Q2 Net Purchases for March are: a) $4,320 b) $10,800 c) $7,200 d) $3,936 A Cash Budget Q3 Total Purchase Disbursements for March are: a) $4,320 b) $10,800 c) $7,200 d) $3,936 A Cash Budget Q4 Line of Credit Interest for May is: a) $591 b) $7,395 c) $49 d) $5,443 A Cash Budget Q5 Financing Required in April is: a) $3,000 b) $2,021 c) $0 d) $194 A Cash Budget Q6 Ending Cash Balance in June is: a) $3,000 b) $7,799 c) $4,799 d) $2,596