The faster a firm grows, the greater is the shortfall in cash and the firm might borrow funds from the bank on a revolving credit arrangement. Why?
a. Most of the cash outflows for expenses occur before the firm receives the cash inflows from a sale.
b. The lag between cash outflows and cash inflows can lead to cash shortfalls.
c. Cash disbursements to employees and suppliers precede cash collections from customers.
d. all of the above
e. none of the above
D
Business
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