Wriston Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $12,000. Budgeted cash disbursements are $70,500, while budgeted cas

Wriston Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $12,000. Budgeted cash disbursements are $70,500, while budgeted cash receipts are $86,100. Wriston Company wants to have an ending cash balance of $40,000. The excess (deficiency) of cash available over disbursements for the month would be

a. $27,600.

b. $168,600.

c. $(27,600)

d. $110,500.

2. The Top Hat Division of Blandon’s Fine Menswear had the following results last year (in thousands).

Sales

$ 4,500,000

Operating income

$ 675,000

Total assets

$ 3,000,000

Current liabilities

$ 250,000

Management’s target rate of return is 12% and the weighted average cost of capital is 9%.

What is the Top Hat Division’s Residual Income (RI)?

a. $ 135,000

b. $ 405,000

c. $ 225,000

d. $ 315,000

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