Batista company management wants to maintain a minimum monthly cash balance of $20,800. at the beginning of april, the cash balance is $21,600, expected cash receipts for april are $246,000, and cash disbursements are expected to be $257,200. how much cash, if any, must be borrowed to maintain the desired minimum monthly balance? amount to be borrowed to maintain the desired minimum monthly balance

Question

Russell Mendoza

Business

25 October, 02:14

Batista company management wants to maintain a minimum monthly cash balance of $20,800. at the beginning of april, the cash balance is $21,600, expected cash receipts for april are $246,000, and cash disbursements are expected to be $257,200. how much cash, if any, must be borrowed to maintain the desired minimum monthly balance? amount to be borrowed to maintain the desired minimum monthly balance

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Trystan Salazar · Answer 1

Current cash balance + cash receipts - cash disbursements = $21,600 + $246,000 - $257,000 = $10,400 cash balance at the end of the month.

Minimum cash balance - cash balance at the end of the month = $20,800 - $10,400 = $10,400 difference.

$10,400 needs to be borrowed.