A3+ has prepared its 3rd quarter budget and provided the following data:

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 August?

A) $15,000

B) $5,000

C) $10,000

D) $20,000

Jul Aug Sep $50,000 $40,000 $48,000 Cash collections Cash payments: Purchases of inventory 31,000 Operating expenses 12,000 Capital expenditures 13,000 22,000 9,000 25,000 10 18,000 11,600