A company that produces racing motorbikes has several models that sell well within the motorcycle racing community and which are very profitable for the company

Despite having a profitable product, why must this company take care to ensure that it has sufficient cash on hand to meet its obligations?
A) Profits from the sales of popular models will be lost when returned to the shareholders in the form of dividends.
B) New models will require a lot of money to develop and bring to market before they generate any revenue.
C) The company will have built up debts which must be repaid in order to bring the current models to market.
D) Equity must be raised to finance the development of new models to replace the existing models.

Answer: B