Assume you are a producer who is preparing a quarterly cash flow budget for the upcoming year. You expect to begin the year with $$60,000$ of current debt. Based on your cash flow projections, you do not expect to make any payment on current debt during quarter $1$; however, you anticipate having cash available of $$13,000$ in quarter $2.$ You must maintain a minimum cash balance of $$5,000$ at the end of each quarter. Assume the interest rate on your current debt is $8\%$ annually and interest accrues only on the outstanding current debt balance $($ie$.$ interest does not compound on itself$).$

How much will you be able to pay toward current principal at the end of quarter $2?$

a$.$

$$8,000$

b$.$

$$5,600$

c$.$

$$3,200$

d$.$

You will not be able to pay back on your outstanding current debt at the end of quarter $2.$