Mercy Medical Center has provided you with the following budget information for April:
$\begin{array}{ll}
\text { Cash collections } & \$ 876,000 \
\text { April } 1 \text { cash balance } & 23,000 \
\text { Cash disbursements } & 978,600
\end{array}$

Mercy has a policy of maintaining a minimum cash balance of $20,000 and borrows only in $1,000 increments.How much will Mercy borrow in April?

Question

Mercy Medical Center has provided you with the following budget information for April:
$\begin{array}{ll}
\text { Cash collections } & \$ 876,000 \
\text { April } 1 \text { cash balance } & 23,000 \
\text { Cash disbursements } & 978,600
\end{array}$

Mercy has a policy of maintaining a minimum cash balance of $20,000 and borrows only in $1,000 increments.How much will Mercy borrow in April?

Quizplus · Accepted Answer

Mercy needs to maintain a minimum cash balance of $20,000. Starting with $23,000 and collecting $876,000, the total cash available is $899,000. With disbursements of $978,600, the shortfall is $79,600. To maintain the minimum balance, they need to borrow $79,600 + $20,000 = $99,600, which rounds up to $100,000 in $1,000 increments.

Mercy Medical Center Has Provided You with the Following Budget