Burns Corp The Cash Balance on April 1 Is $14,000

question 7

Multiple Choice

Burns Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } \hline& \text { Apr } & \text { May } & \text { Jun } \\\hline \text { Cash collections } & \$ 42,000 & \$ 43,000 & \$ 45,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of direct materials } & 4,500 & 7,000 & 4,500 \\\hline \text { Operating expenses } & 6,000 & 7,000 & 4,500 \\\hline \text { Capital expenditures } & 20,000 & 20,000 & 10,000 \\\hline\end{array}$$
The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

• A) $79,500
• B) $25,500
• C) $60,500
• D) $34,500

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Definitions:

Security Market Line

A representation in the Capital Asset Pricing Model (CAPM) that displays the risk versus expected return of the market at any given time.

Beta Coefficient

A measure of a stock's volatility or risk relative to the overall market.

Market Risk Premium

The extra return expected by investors for holding a risky market portfolio instead of risk-free securities.