The cash budget for the first three quarters of a company is given below (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. If necessary, the company will borrow money from its bank to maintain this balance. The company will pay no interest in Quarters 1, 2, and 3. It will repay as much of its borrowings as possible as soon as it has more than $5,000 in cash in a given quarter. Suppose the company starts the first quarter with no bank debt. How much total bank debt does the company expect to have at the end of the third quarter?

a) 8000

b) 47000

c) 41000

d) 14000

Cash Budget Quarter (000 omitted) 1 N 3 $8 ? ? Cash balance, beginning Add collections from customers 88 129 00 00 Total cash available ? ? ? Less disbursements: 56 64 65 Purchase of inventory Selling and administrative expenses Equipment purchases 40 45 51 7 10 11 Dividends N 2 N ? ? ? ? ? ? Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Total financing Cash balance, ending