Assume monthly sales are $280,000 October, $290,000 November, and $345,000


Assume Inventory purchases are $60,000 Oct, $60,000 Nov, and $70,000


Assume the owner gets a cash disbursement in Oct of 45,000, Nov of 51,000, and

Dec of 52,000

Assume wages and salaries are 48% of gross monthly sales

Assume rent is $9500 a month

Assume utilities are 5% of gross monthly

Assume a tax prepayment of $16,000 in


Assume bank interest on the note is $15000/month

Assume a depreciation expense of $15,000 in


Answer the questions: Does the firm need to borrow money at the end of the year to meet expenses?

Why or why not?

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