Marked out of 10.00 Not yet answered Question 3 p Flag question The Raymar Company is preparing its cash budget for the months of April and May. The firm has established a $200,000 line of credit with its bank at a 12% annual rate of interest on which borrowings for cash deficits must be made in $10,000 increments. There is no outstanding balance on the line of credit loan on April 1. Principal repayments are to be made in any month in which there is a surplus of cash. Interest is to be paid monthly. If there are no outstanding balances on the loans, Raymar will invest any cash in excess of its desired end-of-month cash balance in U.S. Treasury bills. May $100,000 Raymar intends to maintain a minimum balance of $100,000 at the end of each month by either borrowing for deficits below the minimum balance or investing any excess cash. Expected monthly collection and disbursement patterns are shown below. Collections: 50% of the current month's sales budget and 50% of the previous month's sales budget. Accounts Payable Disbursements: 75% of the current month's accounts payable budget and 25% of the previous month's accounts payable budget. April $50.000 March $40,000 O All other disbursements occur in the month in which they are budgeted. Budget Information NOVO ves The firm has established a $200,000 line of credit with its banka on which borrowings for cash deficits must be made in $10,000 increments. There is no outstanding balance on the line of credit loan on April 1. Principal repayments are to be made in any month in which there is a surplus of cash. Interest is to be paid monthly. If there are no outstanding balances on the loans, Raymar will invest any cash in excess of its desired end-of-month cash balance in U.S. Treasury bills. May Raymar intends to maintain a minimum balance of $100,000 at the end of each month by either borrowing for deficits below the minimum balance or investing any excess cash. Expected monthly collection and disbursement patterns are shown below. Collections: 50% of the current month's sales budget and 50% of the previous month's sales budget. Accounts Payable Disbursements: 75% of the current month's accounts payable budget and 25% of the previous month's accounts payable budget. All other disbursements occur in the month in which they are budgeted. Budget Information March April Sales $40,000 $50,000 $100,000 Accounts payable 30,000 40,000 40,000 Payroll 60,000 70,000 50,000 25,000 Other disbursements 10,000 30,000 In April, Raymar's budget will result in a need to borrow money, How much the company should Cenovo TY be borrow? ODO
