Delbert,Inc The Cash Balance on June 30 Is Projected to Be

question 145

Multiple Choice

Delbert,Inc.has prepared its third quarter budget and provided the following data: $$\begin{array} { | l | r | r | r | } \hline & { \text { Jul } } &{ \text { Aug } } & { \text { Sep } } \\\hline \text { Cash collections } & \$ 50,000 & \$ 39,600 & \$ 46,100 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of direct materials } & 30,000 & 21,700 & 17,600 \\\hline \text { Operating expenses } & 12,300 & 8000 & 11,600 \\\hline \text { Capital expenditures } & 13,700 & 24,300 & 0 \\\hline\end{array}$$ The cash balance on June 30 is projected to be $4100.The company has 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 has to pay interest every month at an annual rate of 5%.All financing transactions are assumed to take place at the end of the month.The loan balance should be repaid in increments of $5,000 whenever there is surplus cash.How much will the company have to borrow at the end of July?

• A) $0
• B) $5,000
• C) $15,000
• D) $10,000

Analyze the concept of opportunity cost in decision-making processes.

Understand the application of differential analysis in various managerial decisions including product discontinuation and asset replacement.

Evaluate make-or-buy decisions in the context of manufacturing processes.

Grasp the influence of production bottlenecks on pricing strategies and product prioritization.

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Definitions:

Western Countries

Nations, predominantly in the Western Hemisphere and Europe, characterized by democratic forms of government, capitalist economies, and liberal social values.

Intense Experiences

Intense experiences are profoundly deep or extreme events that have a significant emotional, psychological, or physical impact on an individual.

Sensation Seeking

The tendency to seek out varied, novel, complex, and intense experiences and sensations.

Risks

The potential for losing something of value or the possibility of an undesirable outcome.