Question

craft shack has a beginning cash balance for the quarter of $1213. The store has a policy of maintaining a minimum cash balance of $1,000 and is willing to borrow funds as needed to maintain that balance. Currently, the firm has a loan balance of $410. How much will the store borrow or repay if the net cash flow for the quarter is -$260

Answer 1

Answer:

$47

Explanation:

The computation of the borrowed or repay amount is shown below:

Beginning cash balance for the quarter                  $1,213

Net cash flow for the quarter                                  (-$260)

Balance at end before loan                                           $953

Desired minimum cash balance                                 $1,000

More Borrowing by store                                              $47

Total Loan  ($47 + $410)                                                $464