Durango Co. had total cash receipts of $120,000 and total cash disbursements of $112,000. The beginning cash balance was $4,000 and the desired ending cash balance is $8,000. Durango Co. can borrow money in $1,000 increments. Assuming the company currently has $15,000 of outstanding debt, how much can Durango Co. repay and still meet its desired ending cash requirement? (Ignore interest expense.) Multiple choice question.

$6,500

$4,000

$8,000

$2,000

Please explain. Thank you!