Sultan Sundries Must Maintain a Minimum Cash Balance of $34,000

question 37

Multiple Choice

Sultan Sundries must maintain a minimum cash balance of $34,000.At the beginning of February the company's cash balance was $60,000.The budget for February is as follows: $$\begin{array} { l r } \text { Total cash receipts } & \$ 250,000 \\\text { Total cash disbursements } & \$ 245,000 \\\text { Net income } & \$ 50,000 \\\text { Purchase machinery by signing a note } & \$ 35,000\end{array}$$ During February, how much will Sultan need to borrow?

• A)$50,000
• B)$0
• C)$25,000
• D)$4,000

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Definitions:

Market Efficiency

The degree to which stock prices and other securities prices fully reflect all available information and are accurate reflections of the true value of investments.

Capital Markets

Markets that deal in the buying and selling of long-term debt or equity-backed securities to help in capital acquisition.

Insider Information

Confidential information pertaining to a company's activities, unshared with the general public, that could influence an investor's decision to buy or sell the company's stock.

Financial Manager

A professional responsible for managing the financial activities of a company, including planning, organizing, controlling, and monitoring financial resources to achieve organizational goals.