PRS company is preparing cash budget for the forthcoming year with the following details:1st2nd3rd quarter 4th quarterQuarter$180,000 $330,000 | S210,000QuarterTotal cash receiptsTotal cash disbursements | $260,000 | $230,000$230,000$240,000$220,000Cash balance at beginning of the year is $20,000. It is a goal for the company to maintainthe minimum cash balance of $10,000 and borrow the funds from local bank as and whenrequired at quarterly interest rate of 3%. The funds can be borrowed at beginning of thequarter and repaid at end of the year. Repayment can be full or part of loan. Interest willbe due on principal amount that is repaid.Ending cash balance of 2nd quarter is:a. $10,000b. $35,800c. $40,000d. $31,600

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Description: PRS company is preparing cash budget for the forthcoming year with the following details:1st2nd3rd quarter 4th quarterQuarter$180,000 $330,000 | S210,000QuarterTotal cash receiptsTotal cash disbursements | $260,000 | $230,000$230,000$240,000$220,000

Answered: Ending cash balance of 2nd quarter is:…

Business

Accounting

Ending cash balance of 2nd quarter is: a. $10,000 b. $35,800 c. $40,000 d. $31,600

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 1EP

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