Zinc Corporation Is Developing Its Cash Budget for This Month

Zinc Corporation is developing its cash budget for this month. Each month, the firm manufactures and sells $15,000 of products, and it pays $10,000 for wages, taxes, cost of goods sold, and other operating expenses. Zinc has nothing in its checking account even though its target cash balance is $8,000. What amount will Zinc show on the "bottom line" of its cash budget for this month? That is, what will be Zinc's cash position?

A) Zinc has surplus cash of $8,000.
B) Zinc has a cash shortfall of $3,000.
C) Zinc has surplus cash of $6,000.
D) Zinc has a cash shortfall of $23,000.
E) Zinc has surplus cash of $20,000.

Correct Answer:

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