What do the managers learn from the cash budget

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Question - Wish Corporation managers require a minimum monthly cash balance of $25,000. At the beginning of the second quarter of the upcoming year, the cash balance is $27,000.

Half of the $424,000 in sales from last quarter will be collected during Q2. Expected disbursements are budgeted at $220,000.

What do the managers learn from the cash budget for Q2?

1. The cash balance will be reduced during Q2, but no financing will be necessary.

2. The cash balance at the end of Q2 is double the cash balance at the beginning of Q2.

3. The company will need to obtain financing during Q3.

4. The company will need to obtain financing during Q2.

Reference no: EM133133443

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