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According to ABC Company's budgeted income statement for 2023, it is expected to be highly profitable in 2023 . However, its cash budget indicates that
According to ABC Company's budgeted income statement for 2023, it is expected to be highly profitable in 2023 . However, its cash budget indicates that it will likely run out of cash in the fourth quarter of 2023 . Which of the following is not a reasonable way for ABC Company to manage this cash shortage? Trick question - a profitable company cannot run out of cash Encourage customers to pay their bills early (e.g., offer them a small discount for early payment) Invest in new equipment to reduce direct labor costs and improve profitability Borrow money Pay suppliers later than usual and incur a small penalty for late payment
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