Manitou Industries Inc. is preparing the cash budget for the upcoming period. The company wishes to...

 

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Manitou Industries Inc. is preparing the cash budget for the upcoming period. The company wishes to maintain a minimum cash balance of $20,000, and can borrow funds in increments of $1,000 (i.e. if $400 is needed, the company must borrow $1,000). Repayments are made in increments of $500 however. Manitou began the period with $22,100, has projected cash receipts to be $140,000, cash disbursements are budgeted at $142,400. Based on this information, Manitou Industries will need to borrow to maintain their minimum cash requirement. Manitou Industries Inc. is preparing the cash budget for the upcoming period. The company wishes to maintain a minimum cash balance of $20,000, and can borrow funds in increments of $1,000 (i.e. if $400 is needed, the company must borrow $1,000). Repayments are made in increments of $500 however. Manitou began the period with $22,100, has projected cash receipts to be $140,000, cash disbursements are budgeted at $142,400. Based on this information, Manitou Industries will need to borrow to maintain their minimum cash requirement.

Answer rating: 100% (QA)

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