Quality Co requires a minimum cash balance of $25,000 at the end of February of the current year. Any required borrowings take place in increments of $1,000 with annual interest of 8%. Repayments of borrowed funds are also made in increments of $1,000. Assume that borrowings are made on the first day of the month in which the cash is required, and that repayments are made on the last day of a month in which excess cash is available. The cash balance at January 31 is $28,000.  

Actual and projected total sales are as follows: December (prior year actual) $ 90,000 January (actual) $125,000 February (projected) $150,000 March (projected) $ 75,000 Experience shows that of total sales in a given month, 20% will be in cash and 80% will be on account. Experience indicates that the store will collect 60% of credit sales in the month of the sale, 30% in the month following the sale, and 7% in the second month following the sale. The remaining 3% is uncollectible. DairyLand does not give sales discounts for early customer payment.