Ken Sores is the CEO of Black Bear, Inc. Although this firm was only recently incorporated, Ken's firm is already struggling. Among the firm's many problems, Ken notes that (a) customer remain is low for the firm's products, (b) middle management has mismanaged costs, and (c) the liquidity position is far too weak (current was holdings equal $10,000, an the firm does not have a credit line). Recognizing that Black Bear is quickly falling behind rival firms, Ken hires a consultant to examine the firm's liquidity position using . Suppose that Ken provides the firm's historical daily cash flows (shown in the table below). Use this information to answer the questions below.

DAYS	CASH FLOW
1	-$30,000
2	-$5,000
3	-$4,000
4	-$20,000
5	$7,000
6	-$9,000
7	$5,000
8	-$1,000
9	-$2,500
10	-$7,000

A.) Use Excel to calculate Black Bear's average daily cash flow. [ANSWER: -$6,650.00]

B.) Use Excel to calculate the standard deviation of Black Bear's daily cash flow. [ANSWER: -$11,105.68]

C.) Calculate Black Bear's and the associated probability of illiquidity.

D.) Assue that an error in accounting reveal that Black Bear rally only has $5,000 in cash holdings. Recalculate Black Bear's and the associated probability of illiquidity.

E.) What do you find interesting about your calculations from Part D? What is causing these interesting values?

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