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Karim Corporation requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each
Karim Corporation requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $8,400 is used to repay loans at month-end. The cash balance on July 1 is $8,800, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow.
July | August | September | |
---|---|---|---|
Cash receipts | $ 24,400 | $ 32,400 | $ 40,400 |
Cash payments | 28,600 | 30,400 | 32,400 |
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