Your Firm Has a Net Cash Inflow for the Quarter

question 81

Multiple Choice

Your firm has a net cash inflow for the quarter of -$30 (negative) . The beginning cash balance is $15. Company policy is to maintain a minimum cash balance of $5 and borrow only the amount that is necessary to maintain that balance. How much does your firm need to borrow to have a zero cumulative surplus?

• A) $10
• B) $15
• C) $20
• D) $25
• E) $30

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Definitions:

Common Shares Outstanding

The total number of shares of a company that are owned by shareholders, excluding shares owned by the company itself.

Treasury Stock

Shares previously counted among a company's outstanding shares but were later bought back by the business.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Resold

A term referring to items that have been sold and then sold again, either by the original buyer or by another party.