GS Cookie Co. forecasts cash receipts for January and February of $18,000 and $20,000, with cash payments of $6,000 and $8,000, respectively. GS Cookie's cash balance at the beginning of January was $5,000, a level that it attempts to maintain. At the beginning of the year, GS Cookie has a $15,000 balance outstanding on its line of credit at the local bank. Based on its cash budget, how much of the line of credit can GS Cookie repay in January and February combined?

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In January, GS Cookie forecasts cash receipts of $18,000 and cash payments of $6,000, resulting in a net cash flow of $12,000. Adding this to the beginning cash balance of $5,000 gives a total of $17,000. After maintaining the desired cash balance of $5,000, GS Cookie can use $12,000 to repay part of its line of credit. In February, the forecasted cash receipts are $20,000 and payments are $8,000, resulting in a net cash flow of $12,000. Since the company aims to maintain a cash balance of $5,000, it can use the entire net cash flow of $12,000 from February to further repay the line of credit. Therefore, over January and February combined, GS Cookie can repay $12,000 (January) + $12,000 (February) = $24,000. However, since the line of credit balance is only $15,000, GS Cookie can repay the entire outstanding balance of $15,000.