A3+ Has Prepared Its 3rd Quarter Budget and Provided the Following

Multiple Choice

A3+ has prepared its 3rd quarter budget and provided the following data: The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. How much will the company have to borrow at the end of August?

A) $15,000
B) $5,000
C) $10,000
D) $20,000