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Question - Karim Corp. requires a minimum $8,500 cash balance. Loans taken to meet this requirement cost 2% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,900, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.
July
August
September
Cash receipts
$24,500
$32,500
$40,500
Cash payments
28,750
30,500
32,500
Required - How do you make a cash budget for July, August, and September?
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