Question

During September, the capital expenditure budget indicates a $280,000 purchase ofequipment. The ending September cash balance from operations is budgeted to be$40,000. The company wants to maintain a minimum cash balance of $20,000. What isthe minimum cash loan that must be planned to be borrowed from the bank duringSeptember?

Answer 1

Answer:

$260000

Explanation:

$280k  purchase equiment >> Outflow of cash

$40,000>> Operative Cash >> Inflow Cash

$260k >> cash loan in order to achieve balance

------------------------------

$20000 >> Cash balance