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Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost...

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Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) are;July August September;Cash receipts $ 20,000 $ 26,000 $ 40,000;Cash disbursements 28,000 30,000 22,000;Prepare a cash budget for July, August, and September.

 

Paper#76082 | Written in 18-Jul-2015

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