McBride Medical Clinic has budgeted the following cash flows. McBride Medical had a cash balance of $7,000
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McBride Medical Clinic has budgeted the following cash flows.
McBride Medical had a cash balance of $7,000 on January 1. The company desires to maintain a cash cushion of $5,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 1 percent per month. McBride pays its vendor on the last day of the month also. The company had a $30,000 beginning balance in its line of credit liability account.
Required
Prepare a cash budget. (Round all computations to the nearest wholedollar.)
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...
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