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

question 41

Multiple Choice

A3+ has prepared its 3rd quarter budget and provided the following data: $\begin{array}{|l|r|r|r|} \hline& {\text { Jul }} &{\text { Aug }} &{\text { Sep }} \\\hline \text { Cash collections } & \$ 50,000 & \$ 40,000 & \$ 48,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of inventory } & 31,000 & 22,000 & 18,000 \\\hline \text { Operating expenses } & 12,000 & 9,000 & 11,600 \\\hline \text { Capital expenditures } & 13,000 & 25,000 & 0\\\hline\end{array}$ 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.
-
How much will the company have to borrow at the end of July?

• A) $0
• B) $5,000
• C) $15,000
• D) $10,000

---

Definitions:

Attitudes

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.

Decisions

The process of making choices or conclusions after considering various alternatives and their potential outcomes.

Aphasia

A condition characterized by the loss of ability to understand or express speech, caused by brain damage.

Cerebral Cortex

The outer layer of the cerebrum, playing a key role in memory, attention, perception, cognition, awareness, thought, language, and consciousness.