Question

Suppose that Linksys is considering the development of a wireless home networking appliance, called HomeNet, that will provide both the hardware and the software necessary to run an entire home from any Internet connection. Linksys's receivables are 14.6% of sales and its payables are 14.7% of COGS. Forecast the required investment in net working capital for HomeNet assuming that sales and cost of goods sold (COGS) will be: . Click on the Icon located on the top-right corner of the data table below in order to copy its information into a spreadsheet Year 0 Sales $23,479 $26,676 $23,689 COGS $9.492 $10,784 $9,577 4 $8,539 $3,452 The required investment in net working capital for year is $ . (Round to the nearest dollar.) The required investment in net working capital for year 1 is $ (Round to the nearest dollar.) The required investment in net working capital for year 2 is $ (Round to the nearest dollar.) The required investment in net working capital for year 3 is $ . (Round to the nearest dollar.) The required investment in net working capital for year 4 is $ . (Round to the nearest dollar.)

Answer 1

	0	1	2	3	4
Sales		23479	26676	23689	8539
COGS		9492	10784	9577	3452
Receivables		3427.934	3894.696	3458.594	1246.694
Payables		1395.324	1585.248	1407.819	507.444
Working Capital		2032.61	2309.448	2050.775	739.25
Investment in Working Capital		2032.61	276.838	-258.673	-1311.53

Formulae are:

A 1 2 Sales 3 COGS B C 0 1 23479 9492 D 2 26676 10784 E 3 23689 9577 F 4 8539 3452 Receivables 4 =14.6%*C2 =14.6%*D2 l=14.6%*E2 =14.6%*F2 = 14.7%*C3 =14.7%*D3 =14.7%*£3 =14.7%*F3 5 Payables Working Capital 6 =C4-C5 =D4-D5 =E4-E5 =F4-F5 Investment in Working Capital 7 =C6-36 =D6-C6 =E6-06 =F6-E6