Eli Lilly is very excited because sales for his nursery and plant company are expected to increase from $$580,000$ to $$1,200,000$ next year. Eli$$s net assets $($assets $$ liabilities$)$ will remain at $50$ percent of sales. His firm will enjoy an $7$ percent return on total sales. He will begin the year with $$110,000$ in the bank and is already bragging about the Jaguar and luxury townhouse he will buy.

a$.$ Does his optimistic outlook for his cash position appear to be justified?

multiple choice

Yes

No

b$.$ Compute the likely cash balance for the end of the year. $($Negative answers should be indicated by a minus sign.$)$

Cash balance