5. Black Gold Drillers Inc. had sales in December of $60,000. Sales are expected to grow at 5% per month for the forseeable future because of increased oil field drilling. All sales are on credit and are collected in the month following the sale. Inventory purchases for January are expected to be $40,000 per month, growing at 6% per month. Because of credit problems over the past year, Diamond Drillers must pay cash for its purchases. Operating expenses are $30,000 per month. There is a tax payment of $5,000 due in May.

Required: a] Prepare of monthly analysis of the cash inflows and the cash outflows for Diamond Drillers Inc. for the January to June period. Submit your analysis separately (can be in excel, or an image of your handwritten work.)

b] How much cash is projected to be in the bank at the end of January? 3278000

c] How much cash is projected to be in the bank at the end of June? d] Assuming Diamond Drillers ended December with $40,000 cash in the bank, when do you expect a bank loan to be needed?