January and February estimated sales for Sofia Medical Supplies, Co. are $410,000 and $250,000 respectively. Her supplies purchases are paid for during the following month, and are $400,000 in December, $210,000 in January, and $200,000 in February. Other monthly cash expenses (wages, salaries, etc.) average $50,000 per month. The company's cash balance at the beginning of January is $5,000. She also has target cash balance of $5,000. What is the maximum amount Sofia will need to borrow from a bank in order to maintain her target cash balance during January and February? A. $5,000 3. $15,000 C. $40,000 D. $50,000
January and February estimated sales for Sofia Medical Supplies, Co. are $410,000 and $250,000 respectively. Her supplies purchases are paid for during the following month, and are $400,000 in December, $210,000 in January, and $200,000 in February. Other monthly cash expenses (wages, salaries, etc.) average $50,000 per month. The company's cash balance at the beginning of January is $5,000. She also has target cash balance of $5,000. What is the maximum amount Sofia will need to borrow from a bank in order to maintain her target cash balance during January and February? A. $5,000 3. $15,000 C. $40,000 D. $50,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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282.
Subject : - Finance
Transcribed Image Text:January and February estimated sales for Sofia Medical Supplies, Co. are $410,000 and $250,000 respectively. Her
supplies purchases are paid for during the following month, and are $400,000 in December, $210,000 in January, and
$200,000 in February. Other monthly cash expenses (wages, salaries, etc.) average $50,000 per month. The company's
cash balance at the beginning of January is $5,000. She also has target cash balance of $5,000. What is the maximum
amount Sofia will need to borrow from a bank in order to maintain her target cash balance during January and February?
A. $5,000
B. $15,000
C. $40,000
D. $50,000
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