What is the maximum amount a firm may have to borrow

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Reference no: EM131059878

Given the following information, construct the firms cash budget for the given months.

1) All sales are for credit and collections occur after 30 days.

2) A 100,000 treasury bill matures in March

3) Monthly fixed disbursements are $25,000.

4) Variable disbursements are 40% of sales and occur one month prior to sales (April= $70,000)

5) A tax payment of $30,000 is due in April

6) A payment of $50,000 is to be recieved in February

7) The initial cash balance in $20,000

8) The minimum cash balance is $10,000

Sales:

February: $200,000 March: $230,000 April: $200,000

What is the maximum amount a firm may have to borrow?

Reference no: EM131059878

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