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Mary has prepared a cash budget for her business for each month of 2017. She finds...

Mary has prepared a cash budget for her business for each month of 2017. She finds that her business should have at least the minimum cash balance she desires at the end of each month, except for March and April. In total, she will need approximately $15,000 in financing to maintain her minimum desired cash balance for March and April combined. Her best course of action should be to ______.

A. find an investor willing to give her $15,000 in exchange for some equity in her company

B. ask a bank for a $15,000 loan that she can pay back over a three-year span

C. seek some short-term debt, such as factoring, for March and April

D. All of the above make equal sense.

business   accounting   
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Answer #1

solution:

As Mary is short of cash for march and april only, therefore there is no need to issue equity or get loan for a period of 3 years, The best course of action should be to "seek some short-term debt, such as factoring, for March and April"

Hence option C is correct.

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