The Finance Manager of a company presents the actual sales and purchases for the February-April period and the sales and purchases forecasts for the period from May to September 2021.

Month	Purchases	Sales
February	240,000	410,000
March	300,000	500,000
April	280,000	340,000
May	200,000	320,000
June	160,000	280,000
July	220,000	360,000
August	200,000	400,000
September	180,000	500,000

The company makes 15% of all its sales in cash and charges 40% in the month following the sale, and the remaining 45% after two months. Other cash inflows of $ 24,000 expected May and September, $ 30,000 in June and August, and $ 54,000 in July. The company pays in cash 15% of its purchases, 45% the following month and the remaining 40%, two months after the purchase.

Salaries and salaries amount to 10% of the previous month's sales, and are paid in cash. You must pay a rent of $ 50,000 per month. In June and September payments of the interest on a loan of $ 40,000 each month; and in the month of August $ 50,000 will be paid to the loan that the company has with Bank. In the months of July and September, the company must pay dividends to shareholders in the amount of $ 25,000 (each month). A municipal tax of $ 85,000 will have to be paid in the month of September. In addition, in August, the company plans to buy a new machine with a value of $ 40,000 for cash.

a) Assuming the firm has a cash balance of $ 40,000 at the beginning of May, determine the cash balances in the May-September period.

b) Suppose the firm wishes to maintain a minimum cash balance of $ 45,000.

c) What could the company do in the event of a cash shortage? What would you recommend the company to do in the event of a cash surplus?