Royal Industries has budgeted the following information for January.
- Cash Receipts 40,000
- Beginning cash bal. 10,000
- Cash payments 48,000
- Desired Ending Cash Cushion 5,000
If there is a cash shortage, the company borrows money. If a surplus occurs funds are used to repay loans or to invest in short-term assets. All borrowing, repayments, and interest payments occur on the last date of the month. The interest rate is 1% per month. The amount of interest expense incurred for January is
a. 20
b. 30
c. 50
d. none of the above