ABC Corporation is preparing its cash budget for August. The budgeted beginning cash balance is $17,000. Budgeted cash receipts total $187,000 and budgeted cash disbursements total $177,000. The desired ending cash balance for each month is $30,000. The company can borrow up to $120,000 at any time from a local bank, but does not want to incur unnecessary interest charges by borrowing more than it needs to. What should the company do? a. borrow $30,000 b. borrow $20,000 c. borrow $120,000 d. borrow $3,000 e. borrow $10,000

ABC Corporation is preparing its cash budget for August. The budgeted beginning cash balance is $17,000. Budgeted cash receipts total $187,000 and budgeted cash disbursements total $177,000. The desired ending cash balance for each month is $30,000. The company can borrow up to $120,000 at any time from a local bank, but does not want to incur unnecessary interest charges by borrowing more than it needs to. What should the company do? a. borrow $30,000 b. borrow $20,000 c. borrow $120,000 d. borrow $3,000 e. borrow $10,000

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 16MC: In an attempt to better understand RR’s cash position, Johnson developed a cash budget for the first...

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AMC Enterprises is preparing its cash budget for October. The budgeted beginning cash balance is $22,000. Budgeted cash receipts total $195,000, and budgeted cash disbursements total $188,000. The desired ending cash balance for each month is $35,000. The company can borrow up to $150,000 at any time from a local bank but does not want to incur unnecessary interest charges by borrowing more than it needs to. What should the company do? a) borrow $5,000 b) borrow $6,000 c) borrow $150,000 d) borrow $3,000 e) borrow $10,000 help
AMC Enterprises is preparing its cash budget for October. The budgeted beginning cash balance is $22,000. Budgeted cash receipts total $195,000, and budgeted cash disbursements total $188,000. The desired ending cash balance for each month is $35,000. The company can borrow up to $150,000 at any time from a local bank but does not want to incur unnecessary interest charges by borrowing more than it needs to. What should the company do? a) borrow $5,000 b) borrow $6,000 c) borrow $150,000 d) borrow $3,000 e) borrow $10,000
What should the company do?
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How would this be solved ?
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