8.If a business passes the solvency test but fails the cash flow test, what does this indicate?

A.That the business has sufficient liquidity to repay its proposed debt, but that future cash flow is uncertain. Analysis should continue. B.That the business will not generate sufficient cash flow in year 1, but that solvency going forward will improve. Analysis may continue if you are willing to defer repayment. C.That the business is unlikely to generate cash flow to repay the loan, although it would likely be able to do so by liquidating its other assets. Analysis would not normally proceed.