Chatelain Company Is Preparing Its Budget for the Third Quarter

question 41

Multiple Choice

Chatelain Company is preparing its budget for the third quarter.The cash balance on June 30 was $32,000.Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | } \hline & { \text { Jul } } & { \text { Aug } } & { \text { Sep } } \\\hline \text { Cash collections } & \$ 54,000 & \$ 53,000 & \$ 54,000 \\\hline \text { Cash payments } & & & \\\hline \text { Purchases of direct materials } & 22,000 & 24,000 & 21,000 \\\hline \text { Operating expenses } & 21,000 & 19,000 & 27,000 \\\hline \text { Capital expenditures } & 8,000 & 9,000 & 13,000 \\\hline\end{array}$$ What amount should be shown in the cash budget for the cash balance at the end of July?

• A) $19,000
• B) $35,000
• C) $105,000
• D) $86,000

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Definitions:

Strike Price

The predetermined price at which an option can be exercised, either to buy or sell the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an underlying asset at a predetermined price within a specific timeframe.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Strike Price

The predetermined price at which the holder of an option can buy (in a call option) or sell (in a put option) the underlying asset.