Lakewood Laser SkinCare's ending cash balance as of January 31, 2012 (the end of its fiscal year 2011) was $10,000. Its expected cash collections and payments for the next six months are given in the following table.

Month........................... Collections.......................... Payments

February............................. $16,500........................... $19,400

March.................................. 18,300............................ 20,800

April.................................... 22,700........................... 21,600

May..................................... 29,100........................... 24,300

June..................................... 32,500............................ 26,700

July...................................... 36,000............................ 27,200

a. Calculate the firm's expected ending cash balance for each month.

b. Assuming that the firm must maintain an ending cash balance of at least $9,000, how much must they borrow during each month?

c. If the firm must pay 5% annual interest on its short-term borrowing, how does this affect your ending cash balance calculations?

d. Finally, how would your ending cash balance change if the firm uses any cash in excess of the minimum to pay off its short-term borrowing in each month?