The Corner Store has a beginning cash balance for the quarter of $1,240. The store has a policy of maintaining a minimum cash balance of $1,000 and is willing to borrow funds as needed to maintain that balance. How much will the store have to borrow if the net cash flow for the quarter is - $370?

Question

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The store starts with $1,240 and has a net cash flow of -$370, leaving it with $870 ($1,240 - $370). To maintain a minimum balance of $1,000, the store needs to borrow $130 ($1,000 - $870).

The Corner Store Has a Beginning Cash Balance for the Quarter