During December, the Capital Budget Indicates a $280,000 Purchase of Equipment

question 157

Multiple Choice

During December, the capital budget indicates a $280,000 purchase of equipment for cash.The ending November cash balance is budgeted to be $40,000.Cash receipts are $840,000, and cash disbursements are $610,000 during December.The company wants to maintain a minimum cash balance of $20,000.What is the minimum cash loan that must be planned to be borrowed from the Bank during December?

• A)$30,000
• B)$10,000
• C)$50,000
• D)$0

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Definitions:

Standard Deviations

Measures that express the variability or spread in a set of data from its mean, showing how much variation there is from the average.

Normal Curve

A symmetrical, bell-shaped curve representing the distribution of a set of data where most occurrences take place in the middle of the range and taper off toward either end.

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, expressed in terms of standard deviations from the mean.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean.