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A company is preparing their 4th quarter cash summary budget. Based on their beginning cash balance...

A company is preparing their 4th quarter cash summary budget.

Based on their beginning cash balance and anticipated cash receipts and cash disbursements (payments), here are the ending cash balances initially planned each month.  The balances shown below are BEFORE any borrowing of money or repayment of loans and interest.

Management wants to keep a minimum cash balance of $20,922. Therefore, they will clearly need to borrow money in November. Luckily, December looks like a good month and they will have plenty of money to pay the loan back.

Suppose their line of credit with the bank charges 12% interest annually. Assume if they borrow money in any month with a shortfall, they borrow it on the 1st day of the month. So you should assume they borrowed the money on the 1st day of November. If they pay money back in any one month, they will pay it back on the last day of the month.

October November December
Ending Cash Balance per the initial budget plan analysis $23,852 $12,984 $46,786

What will their final ending cash balance be as of December 31st after taking out the loan, paying back the loan and paying back the interest? Don't round any intermediate calculations. Round your answer to the nearest whole number.

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ekkarill92 answered 2 years ago
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