Royal Industries has budgeted the following informaton for January

Cash Receips 40,000

Beginning cash bal. 10,000

Cash payments 48,000

Desired Ending Cash Cushtion 5,000

If there is a cash shortage, the company borrows money. If a surplus ocurs funds are used to repay loans or to inbest in short-term assets. All borrowing, repayments, and interest payments occur on the last da of the month. The interest rate is 1% per month. The amount of interest expense incured for January is

a. 20

b. 30

c. 50

d none of the above