Your firm has a net cash inflow for the quarter of - $30 (negative). The beginning cash balance is
$15. Company policy is to maintain a minimum cash balance of $5 and borrow only the amount that is necessary to maintain that balance. How much does your ﬁrm need to borrow to have a zero
Cumulative surplus?

Question

Quizplus · Accepted Answer

The firm needs to borrow $20 to cover the $30 net cash outflow and maintain the minimum cash balance of $5. Starting with $15, the firm needs $20 to reach $35, which after the outflow leaves $5.

Your Firm Has a Net Cash Inflow for the Quarter