Question
The companySIGMA is preparing its budgets for the month of April 2021.It has a cash balance of $25,000 at the end of March 2021.The company's
The companySIGMA is preparing its budgets for the month of April 2021.It has a cash balance of $25,000 at the end of March 2021.The company's sales are collectible according to the following ratios: 85% in the month of sale, 13% within a month, and 2% uncollectible.The sales for February, March and April 2021 are $260,000, $150,000, and $230,000 respectively.The monthly operating expenses would be $60,000, including a depreciation charge of $10,000. The monthly operating expenses would be $60,000, including a plant depreciation charge of $10,000, payable in cash. The operating costs are payable in cash. April merchandise purchases are expected to be $250,000, payable in cash. The company wishes to maintain a minimum cash balance of $20,000 at the end of April. end of April. The company has a line of credit with the local bank. The loans are made at the beginning of each month and are repayable at the end of each month if there is a cash surplus. The annual interest rate is 6% and interest is payable at the end of each month. How much should the company borrow during the month of April? (If necessary, do not use decimal points in your calculations, e.g. 26,020.76=26020)
A.105527$
B.90452$
C.80402$
D.85106$
E. NONE OF ABOVE
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