Your firm has a net cash inflow for the quarter of $60. The beginning cash balance is $35. Company policy is to maintain a minimum cash balance of $15 and borrow only the amount that is necessary to maintain that balance. How much does your firm need to borrow or how much can it repay on its loans to have a zero cumulative surplus?
A) Borrow $40.
B) Borrow $10.
C) Repay $10.
D) Repay $40.
E) Repay $80.

Question

Quizplus · Accepted Answer

The Answer of Your firm has a net cash inflow for the quarter of $60. The beginning cash balance is $35. Company policy is to maintain a minimum cash balance of $15 and borrow only the amount that is necessary to maintain that balance. How much does your firm need to borrow or how much can it repay on its loans to have a zero cumulative surplus?
A) Borrow $40.
B) Borrow $10.
C) Repay $10.
D) Repay $40.
E) Repay $80.

Your Firm Has a Net Cash Inflow for the Quarter