Alice's Wholesale Ltd. is trying to plan its cash flows for the next year. On January 2, 2011, it has $7,000 in the bank. On average, 50% of sales each month are collected in the following month, with the remainder collected in the second following month. All sales are on credit. On average, 40% of purchases each month are paid in the following month, with the remainder paid in the second month following the purchase. The monthly data are shown below.

Required:
(a) Determine the monthly cash balance at the end of every month in 2011.
(b) Will the cash run out?

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2810 2011 Nov. Dec. Jan. Feb. Mar. Apr. May u Jul. Aug. Sep. ct. Nov. Dec Sales 5,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 Purchases 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000