XYZ company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash at the beginning of the period. Cash collections from customers for the quarter are budgeted at $28,000. Cash payment during the quarter for inventory purchases are budgeted at $25,000. The desired cash balance at the end of the quarter is $6,000. Other operating expenses for the quarter are budgeted at $20,000, which includes $3,000 depreciation. Cash expenses are paid in the month incurred. How much borrowing will the company need during the quarter? Select one: O a. $10,000 O b. $13,000 O c. None of the given answers O d. $2,000 O e. $16,000

XYZ company is preparing its cash budget for the first quarter of the year. It has $10,000 in cash at the beginning of the period. Cash collections from customers for the quarter are budgeted at $28,000. Cash payment during the quarter for inventory purchases are budgeted at $25,000. The desired cash balance at the end of the quarter is $6,000. Other operating expenses for the quarter are budgeted at $20,000, which includes $3,000 depreciation. Cash expenses are paid in the month incurred. How much borrowing will the company need during the quarter? Select one: O a. $10,000 O b. $13,000 O c. None of the given answers O d. $2,000 O e. $16,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 5P

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