A Company Is Preparing Its Cash Budget

question 120

Multiple Choice

A company is preparing its cash budget. Its cash balance on January 1 is $290,000, and it has a minimum cash requirement of $340,000. The following data have been provided: ​
-Pelican Roost Hotel has 100 rooms. For a normal February, it averages 60% capacity. However, there are three 3-day events scheduled for February in which the hotel expects to be completely booked. Of the additional guests coming for the events, one-half will likely attach an extra day before or after the event to enjoy the beach and/or other local sights. You have determined that the housekeeping staff requires 30 minutes to clean each occupied room. The housekeeping staff is paid $14 per hour. The housekeeping labor cost is fully variable to the number of occupied rooms. Assuming it is not a leap year, the total housekeeping budget for February is

• A)$14,420
• B)$14,700
• C)$28,840
• D)$29,400

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Definitions:

Trading Begins

Refers to the start of trading activities on a stock exchange for a particular trading session or for a newly listed company's shares.

IPOs

Initial Public Offerings, the process by which a private company goes public by selling its stocks to the general public for the first time.

Earnings Per Share

A financial metric that measures the portion of a company's profit allocated to each outstanding share of common stock.

Price Earnings Ratios

A valuation metric for stocks, calculated by dividing the current market price of a stock by its earnings per share (EPS).