Please note the correction below to the 4th and 5th editions of Management and the Arts. Thanks to Fleurette Fernando for spotting the error in Figure 9.9.


Figure 9.9, page 358 in the 5th edition and page 295 in the 4th edition, has a formula error in the right most total column. The total for the line named “Variance” is $40,470. The “Reserves” line directly below is $40,470. There was an error in the original spreadsheet used to create Fig. 9.9. There should be NO number in the “Balance” cell  on the bottom right of the Cash Flow Projections. The formula error added the variance and reserves and that created an incorrect “Balance” of $80,940.

The text on page 359 in the 5th edition and page 294 in the 4th edition should read:

“Even though the company is projecting ending the season with a $40,470 reserve (see Reserves row in Fig. 9.9), there will be 4 months of the season where there is a negative cash flow.”