Solution-What are the ending cash balances

What are the ending cash balances

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Reference no: EM132712335

Problem - Durango Mountain Bike Tours' ending cash balance as of December 31, 2020 was $10,000. Its expected cash collections and payments for the next six months are given in the following table.

Month	Collections	Payments
January	$18,563	$21,825
February	30,881	35,100
March	51,075	48,600
April	81,844	68,344
May	109,688	90,113
June	141,750	107,100

Required -

a. Calculate the firm's expected ending cash balance for each month.

b. Assuming that the firm must maintain an ending cash balance of at least $12,000, how much must they borrow during each month?

c. If the firm must pay 5% annual interest on its short-term borrowing, what are the ending cash balances for each month?

d. What are the ending cash balances if the firm uses any cash in excess of the minimum to pay off its short-term borrowing in each month?

Reference no: EM132712335

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What are the ending cash balances

Reference no: EM132712335

Reference no: EM132712335

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