Posted: March 14th, 2017

The company is required to maintain a minimum cash balance of $ 5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $ 5,000 and pays interest monthly at an annual rate of 5%.

Problem 8: AAA Company is preparing its 3rd quarter budget and provides the following data: Aug Sep Cash collections $ 40,000 $ $ 50,000 48,000 ments Purchases of inventory 31,00 Operating expenses 11,600 9,000 12,000 19,00 Capital expenditures Cash balance at June 30 is projected to be $ 4,000. The company is required to maintain a minimum cash balance of $ 5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $ 5,000 and pays interest monthly at an annual rate of 5%. All financing transactions are assumed V to take place at the end of the month. Loan balance should be repaid in increments of es 000 when there is surplus cash. please complete the cash budget: