Diemans Ltd Has Provided a Part of Its Budget for the Second

question 8

Multiple Choice

Diemans Ltd has provided a part of its budget for the second quarter:
$$\begin{array} { | l | l | l | l | } \hline & \text { Apr } & \text { May } & \text { Jun } \\\hline \text { Cash collections } & \$ 40,000 & \$ 42,000 & \$ 40,000 \\\hline \text { Cash payments } & & & \\\hline \text { Purchases of inventory } & 5000 & 7200 & 7000 \\\hline \text { Operating expenses } &6000 & 7000 &6 000 \\\hline \text { Capital expenditures } & 4000 & 4600 & 4000 \\\hline\end{array}$$
The cash balance on 1 April is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the cash balance at the end of April.

• A) $85,200
• B) $54,000
• C) $62,200
• D) $39,000

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Definitions:

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal amount.

Principal

This term refers to the original sum of money borrowed in a loan or the initial amount of investment before earnings or losses.

Expansionary Gap

A situation where the output of an economy is greater than the full employment output, often leading to inflation.