At the beginning of the year,you have an outstanding short-term loan of $10 that was used to cover your cash needs for the previous year.During the current year,you expect to pay $4 interest and have an annual net cash inflow of -$10 (negative),excluding the interest payment.What is your anticipated loan balance at year-end?

Question

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The initial loan balance is $10. With a net cash outflow of $10 and an interest payment of $4, the total cash needed is $14. Adding this to the initial loan balance results in a year-end loan balance of $24.

At the Beginning of the Year,you Have an Outstanding Short-Term