The company wants to have a minimum of 50000 cash balance

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Reference no: EM13371345

The company wants to have a minimum of $50,000 cash balance at the end of each quarter.

Assume cash is borrowed at the beginning of a quarter and repaid at the end of a quarter. Simple Interest is based on 1% each month on outstanding borrowings.  Beginning cash balance is $60,000.  Cash borrowed is assumed to happen on the first day of a quarter and any payments are assumed to occur on the last day of a quarter. Interest is only paid on cash repayments.

 

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Total Year

Cash Balance - Beginning

60,000

 

 

 

 

Total Cash Available

450,000

563,000

858,000

937,000

2,809,600

Total Cash Disbursements

460,000

563,000

739,000

760,000

2,522,000

Cash Flow - Excess (deficiency)

 

 

 

 

 

 

Financing:

 

 

 

 

 

Borrowings - Line of credit

 

 

 

 

 

Repayments - Line of Credit

 

 

 

 

 

Interest Paid - Line of Credit

 

 

 

 

 

Total Financing

 

 

 

 

 

 

 

 

 

 

 

Cash Balance - Ending

 

 

 

 

 

 

 

 

 

 

 

Monthly Interest Rate

1.00%

 

 

 

 

Reference no: EM13371345

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