The company must maintain a minimum cash balance of $8,000. During April, expected cash receipts are $52,000. They need to take owe 4,100 more to maintain the cash balance.
How can a minimum cash balance be determined?
You may use the function MAX to model the minimal cash balance (net cash and debt, minimum cash). If there is a minimum cash limitation, you must then include the necessary debt financing to retain the cash on the balance sheet in order to model the debt balance.
What justifies maintaining a minimum cash balance?
Companies can prevent cash shortages brought on by cash outflows exceeding cash inflows during a specific accounting period by maintaining a minimum cash balance. It is the smallest sum of cash that a business maintains on hand to achieve cash maintenance and planning goals.
To know more about minimum cash balance, click here- brainly.com/question/29865895
#SPJ4
