A3+ Has Prepared Its Third Quarter Budget and Provided the Following

question 54

Multiple Choice

A3+ has prepared its third quarter budget and provided the following data:
$$\begin{array} { | l | l | l | l | } \hline &{ \text { Jul } } & { \text { Aug } } & { \text { Sep } } \\\hline \text { Cash collections } & \$ 49,000 & \$ 39,500 & \$ 46,800 \\\hline \text { Cash payments } & & & \\\hline \text { Purchases of inventory } & 28,000 & 21,500 & 17,000 \\\hline \text { Operating expenses } & 12,400 & 9100 & 11,200 \\\hline \text { Capital expenditures } & 13,500 & 24,700 &0 \\\hline\end{array}$$
The cash balance on 30 June is projected to be $4200.The company has to maintain a minimum cash balance of $5,000 and is authorised 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) $48,800
• B) $15,000
• C) -$6500
• D) $8458

---

Definitions:

Conditional Statement

A statement in logic that asserts that if one thing is true, then another thing will follow as a consequence.

Antecedent Statement

A proposition or assertion that precedes another in logic, often serving as a premise in an argument.

Logic of Statements

The study of the principles and criteria for evaluating deductive arguments and the validity of statements.

Equivalent

Equal in value, measure, force, effect, or significance.