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Batista company management wants to maintain a minimum monthly cash balance of $20,800. at the beginning of april, the cash balance is $21,600, expected cash receipts for april are $246,000, and cash disbursements are expected to be $257,200. how much cash, if any, must be borrowed to maintain the desired minimum monthly balance? amount to be borrowed to maintain the desired minimum monthly balance

Respuesta :

Current cash balance + cash receipts - cash disbursements = $21,600 + $246,000 - $257,000 = $10,400 cash balance at the end of the month. 

Minimum cash balance - cash balance at the end of the month = $20,800 - $10,400 = $10,400 difference.

$10,400 needs to be borrowed. 
marvineetesh3

The cash that must be borrowed to maintain the desired minimum monthly balance is $10,400.

What is cash balance?

The sum of money on account is referred to as the cash balance. It is calculated by adding this month's cash flow to the prior month's cash balance or deducting if the cash flow is negative.

Computation of desired cash balance:

According to the given information,

Current Cash Balance = $21,600,

Cash Receipts = $246,000, and

Cash Disbursements = $257,000

Then, Cash balance at the end of the month:

[tex]\text{Cash Balance at the End of the Month} = \text{Current Cash Balance + Cash Receipts - Cash Dis.}\\\\ \text{Cash Balance at the End of the Month} = \$21,600 + \$246,000 - \$257,000\\\\ \text{Cash Balance at the End of the Month} = \$10,400[/tex]

Then, the Desired Cash Balance is:

[tex]\text{Desired Cash Balance}=\text{Minimum Cash Balance - Cash Balance at the End of the Month}\\\\\text{Desired Cash Balance}= \$20,800 - \$10,400\\\\\text{Desired Cash Balance}= \$10,400[/tex]

Therefore, $10,400 needs to be borrowed by the Batista company.

To learn more about the cash balance, refer to:

https://brainly.com/question/27062172

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