Durango Mountain Bike Tours’ ending cash balance as of December 31, 2020 was $10,000. Its expected cash collections and payments for the next six months are given in the following table.

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 $12,000, how much must they borrow during each month?

c. If the firm must pay 5% annual interest on its short-term borrowing, what are the ending cash balances for each month?

d. What are the ending cash balances if the firm uses any cash in excess of the minimum to pay off its short-term borrowing in each month?

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Month January February March April May June Collections $18,563 30,881 51,075 81,844 109,688 141,750 Payments $21,825 35,100 48,600 68,344 90,113 107,100