Question
Bantam Industries has budgeted the following information for March: Cash receipts $ 271,000 Beginning cash balance 5,000 Cash payments 280,000 Desired ending cash balance 25,000
Bantam Industries has budgeted the following information for March:
Cash receipts $ 271,000
Beginning cash balance 5,000
Cash payments 280,000
Desired ending cash balance 25,000
If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before March 1. How much cash will the company need to borrow in March?
Multiple Choice
A. $25,000
B. $29,000
C. The company should not need to borrow any cash in March
D. $4,000
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