Your Firm Has a Net Cash Inflow for the Quarter

question 102

Multiple Choice

Your firm has a net cash inflow for the quarter of $60. The beginning cash balance is $35. Company policy is to maintain a minimum cash balance of $15 and borrow only the amount that is necessary to maintain that balance. How much does your firm need to borrow or how much can it repay on its loans to have a zero cumulative surplus?

• A) borrow $40
• B) borrow $10
• C) repay $10
• D) repay $40
• E) repay $80

---

Definitions:

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Equity Capital

Money gathered by a firm in return for a stake in the company's ownership.

"Love Money"

Funds borrowed from family or friends to start a business, characteristically under flexible terms but carrying the risk of personal relationship strain.

Personal Assets

Assets owned by an individual, including cash, savings, property, and investments.