AcelRx Pharmaceuticals, Inc. (ACRX), develops therapies for pain relief for a variety of patients, including cancer and trauma patients. The following data (in thousands) were adapted from financial statements of a recent year.

Net cash flows used in operating activities .....................................    $(29,765)

End of the year cash and cash equivalents .....................................       52,902

Short-term investments* ..................................................................         7,567

*Includes U.S. short-term government securities that are readily convertible to cash.

1. Compute the monthly cash expenses. Round to nearest thousand.

2. Compute the ratio of cash to monthly cash expenses, excluding short-term investments. Round to one decimal place.

3. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses. Round to one decimal place.

4. Comment on the results from parts (2) and (3).

5. AceIRx had negative cash flows from operations for at least the past three years, yet cash and cash equivalents and short-term investments are $60,469 ($52,902 + $7,567). How could this have happened?