Question 1: Udonis, Inc.has producedthefollowingforecastforcashflowfromoperationsforJuly through September, 2009.At the end of June, Udonis expects to having a closing cash balanceof$5,500andaloancovenantrequiresthecompanytomaintainaminimum balance of $5,000.

Thecompanyhasalineofcreditavailableatanannualinterestrateof12%. It must pay interest on any loan each month based on the outstanding balance at the end of the previous month and, to minimize interest expense, it repays loans as soon as funds are available.

Ignoringtaxes,showthecompany'scashbalanceandloanoutstandingattheendof each month.