At the beginning of January, the South Carolina sportsplex has $150,000 of cash on hand. The firm's forecasts of cash flows for the first six months of the year are given here in ($1,000's). The S.C. Sportsplex wants to maintain a cash balance of at least $100,000 at all times. If the balance falls below that level, the firm will borrow to bring its balance up to $100,000. If more than $100,000 of cash is available, it will use the excess to reduce its short-term borrowing. Show the monthly net cash flow, borrowing (if any), loan repayments, cash balance, and cumulative borrowing balance.
January - June
Cash Inflows: 100,120,150, 320, 350, 240
Cash Outflows: 150, 180, 200, 290, 240, 180
At the end of June:
a. borrowing will be $30,000 and the cash balance will be $100,000
b. borrowing will be $10,000 and the cash balance will be $100,000
c. borrowing will be $0 and the cash balance will be $110,000
d. borrowing will be $0 and the cash balance will be $130,000
e. borrowing will be $0 and the cash balance will be $150,000
f. borrowing will be $0 and the cash balance will be $170,000
g. borrowing will be $0 and the cash balance will be $190,000