ATC 5-5 Ethical Dilemma How bad can it be? Alonzo Saunders owns a small training services company that is experiencing growing pains. The ny has grown rapidly by offering liberal credit terms to its customers. Although his competitor require payment for services within 30 days, Saunders permits his customers to delay payment for up to 90 days. Saunders's customers thereby have time to fully evaluate the training that employees receive before they must pay for that training. Saunders guarantees satisfaction. If a customer is unhappy, the customer does not have to pay. Saunders works with reputable companies, provides t quality training, and rarely encounters dissatisfied customers. The long collection period, however, has created a cash flow problem. Saunders has a $100,000 accounts receivable balance, but needs cash to pay current bills. He has recently negotiated a loan agreement with National Bank of Brighton County that should solve his cash flow problems. The loan agreement requires that Saunders pledge the accounts receivable as collateral for the loan. The bank agreed to loan Saunders 70 percent of the receivables balance, thereby giving him access to $70,000 cash. Saunders is satisfied with this arrangement because he estimates he needs approxi mately $60,000. On the day Saunders was to execute the loan agreement, he heard a rumor that his biggest customer was experiencing financial problems and might declare bankruptcy. The customer owed Saunders . Saunders promptly called the customer's chief accountant and learned "off the record" tht was negative and most the rumor was true. The accountant told Saunders that the company's net worth