Southern Company is preparing a cash budget for April. The company has $12,000 cash at the beginning of April and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during April. Southern Company has an agreement with its bank to maintain a cash balance of at least $10,000. To maintain the $10,000 required balance, during April the company must:

a. borrow $2,500.

b. borrow $7,500.

c. borrow $5,000.

d. borrow $4,500.