Question
A non-profit firm is trying to decide whether to expand their operations now and provide more meals to people experiencing homelessness or keep their cash
A non-profit firm is trying to decide whether to expand their operations now and provide more meals to people experiencing homelessness or keep their cash reserves. Their cash reserves are currently just large enough to cover the expansion OR the expected changes in revenues and expenditures from the next recession. As the nonprofit considers the costs and benefits of these two options, the following is the best response given the information provided: a. Definitely expand operations because it will provide additional meals now. b. Definitely keep their cash reserves because they need to be prepared for the next downturn. c. The non-profit should consider the benefits of the additional meals provided now by the expansion, relative to the costs of shrinking their cash reserves, thereby making them less prepared for the next downturn (which will likely shrink meal provision at a time when need is particularly high).
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