Cash

is collected from customers in the following pattern: Month of sale  30%

40% of purchases are paid for in

cash in the month of purchase, and the balance is paid the following month.

Labor costs are 20% of sales. Other

operating costs are $30,000 per month (including $8,000 of depreciation). Both

of these payments are made in the month incurred.

The cash balance on March 1 is

$8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in

multiples of $1,000.