Answer:
A.$130
B. $13,130
Explanation:
Loan taken at the beginning of april in order to maintain cash balance of $40,000 = $40,000 - $27,200 = $12,800 = $13,000 (Increment of $1,000)
Interest payment estimated for april = $13,000*12%*1/12 = $130
Solution b:
Cash balance at the end of april = $27,200 + $13,000 - $130 = $40,070
Cash balance at the end of may before financing effect = Cash balance at the beginning + Excess of cash collected over cash payments
= $40,070 + $31,200 = $71,270
Total financin effect for may = Loan repayment + Interest repayment = $13,000 + $13,000*12%*1/12 = $13,130
