A3+ Has Prepared Its 3rd Quarter Budget and Provided the Following

question 82

Multiple Choice

A3+ has prepared its 3rd quarter budget and provided the following data: The cash balance on June 30 is projected to be $4,000. 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. Calculate the final cash balance at the end of August taking into consideration all the financing transactions.

• A)$6,958
• B)$5,254
• C)$7,100
• D)$4,320

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Definitions:

Watchdog Responsibility

The obligation of overseeing and holding accountable entities or individuals, particularly in financial or public interest contexts.

Common Stock

A type of security that represents ownership in a corporation, granting shareholders voting rights and a share in the company's profits via dividends.

Real Asset

Physical or tangible assets that have value, such as real estate, commodities, and natural resources.

Finance

The study and management of money, investments, and other financial instruments. It involves the processes of creating, managing, and investing capital.