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On January 1 Witt Company has a beginning cash balance of $126000. During the year the company expects cash disbursements of $1020000 and cash receipts of $870000. If Witt requires an ending cash balance of $120000 Witt Company must borrow
A) $96000.
B) $120000.
C) $144000.
D) $276000.
Cash Balance
The amount of cash on hand or in bank accounts, immediately available to a business or individual.
Cash Disbursements
Money paid out by a business in the course of its operations, such as paying for expenses, purchasing assets, or repaying loans.
Cash Receipts
The collection of cash, typically from sales, services, or other forms of income.
- Understand the role of credit conditions and timing in cash flows in shaping expected cash receipts and payments.
- Comprehend the principle of preserving a minimal cash reserve and its influence on financial decision-making.
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Learning Objectives
- Understand the role of credit conditions and timing in cash flows in shaping expected cash receipts and payments.
- Comprehend the principle of preserving a minimal cash reserve and its influence on financial decision-making.
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