This is for my Entrepreneurial Finance class and the problem is as follows:

The Itsar Products Company has made the following monthly estimates of cash receipts and cash disbursements when preparing cash budgets for the next 12 months. Itsar products has beginning cash on hand of $10,000 and wants to maintain this minimum cash level throughout the year.

Month Cash Receipts Cash Disbursements

Jan 100,000 100,000

Feb 90,000 110,000

March 80,000 110,000

April 100,000 150,000

May 120,000 180,000

June 160,000 180,000

July 200,000 180,000

August 250,000 180,000

Sept. 250,000 150,000

Oct. 200,000 110,000

Nov. 140,000 100,000

Dec. 100,000 100,000

A) Determine whether Itsar Products will have a cash need during the next year.

B) If Itsar Products has a cash need, indicate the month when the need will begin and determine the month and the amount when the maximum need occurs.

I believe the answer to Part A is: Yes Itsar Products will have a cash need during the year.

Part B is what trips me up. The cash need begins in February, they are short 20,000 and since they wish to keep 10,000 on hand they will need 30,000. The biggest need would be in May when they need 60,000 to keep them where they wish to be.

However that seems too simple so I'm hoping someone can help guide me in the direction I'm probably meant to go.