A company is preparing a cash budget for the month of December. It estimates a cash balance of $8,525 at the beginning of the month. The anticipated cash receipts are $154,600 and the cash disbursements are $160,950. The company requires to maintain a minimum cash balance of $10,000. Any deficit is loaned from the bank at a simple interest of 1% per month. Compute the preliminary cash balance at the end of December before any loan activity. a. $2,175 b. $14,875 c. $10,000 d. S12.175

A company is preparing a cash budget for the month of December. It estimates a cash balance of $8,525 at the beginning of the month. The anticipated cash receipts are $154,600 and the cash disbursements are $160,950. The company requires to maintain a minimum cash balance of $10,000. Any deficit is loaned from the bank at a simple interest of 1% per month. Compute the preliminary cash balance at the end of December before any loan activity. a. $2,175 b. $14,875 c. $10,000 d. S12.175

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 1EP

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