The Cash Balance At November 1st Was 75 000 It Is The Company S Policy To Maintain A 2903629

The cash balance at November 1st was $75,000. It is the company’s policy to maintain a minimum cash balance of $50,000 at the end of each month. Cash receipts (from cash sales and collection of accounts receivable) are projected to be $525,000 for November and $450,000 for December. Cash disbursements (sales commissions, advertising, delivery expense, wages, utilities, etc.), prior to financing activity, are scheduled to be $450,500 in November and $550,000 in December. Borrowing, when needed, is done at the beginning of the month—in increments of $1,000. The annual interest rate on any such loans is estimated to be 12%. Interest on any outstanding loans is paid in cash at the end of the month. Interest on any outstanding loans is paid in cash at the end of the month. Repayments of principal (if any) are assumed to occur at the end of the month. As of November 1st, the company has a $50,000 short-term loan from the local bank. This loan is payable at the end of November.

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