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Mary's Bed and Breakfast needs to keep a cash balance of at least $10,000. She has budgeted the following for the month of December: Payments
Mary's Bed and Breakfast needs to keep a cash balance of at least $10,000. She has budgeted the following for the month of December:
Payments to suppliers
$5,000
Payments to employees
$4,000
Credit sales
$8,000
Cash collections
$7,500
Depreciation expense
$500
Other cash expenses
$1,000
Beginning cash balance
$11,000
How much will Mary need to borrow to maintain the minimum cash balance?
$0
$1,000
$1,500
$2,000
I don't understand why the answer is 1500
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