Question
The Sunflower, Inc makes and sells tasty hamburgers for $8 per unit with a unit variable cost of $6. All sales are for cash and
The Sunflower, Inc makes and sells tasty hamburgers for $8 per unit with a unit variable cost of $6. All sales are for cash and the variable costs are paid immediately. The company has budgeted the following data for November.
Sales | 20000 units |
Cash,Beginning Balance | $34,000 |
Selling and administratie(of which depreciation $5,000) | $53,000 |
Required minimum cash balance | $33,000 |
if necessary, the company will borrow cash from a bank on the first day of November. Assume that the borrowing can be made in any (exact) amount, but bears interest at 2% per month. The November interest will be paid in cash during November. What is the closest amount of cash that must be borrowed on November 1 to cover all cash disbursements and to obtain the desired November 30 cash balance.
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