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Because of rapid growth, you no longer want to sell your business. In fact, you're interested in buying one. Before starting any serious discussions with

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Because of rapid growth, you no longer want to sell your business. In fact, you're interested in buying one. Before starting any serious discussions with companies, you first want to decide which ones are even worth talking to. Your priority is to find a business positioned for growth, and this means one that is profitable and is buying up a large inventory of land for future development projects. You reason that it's no good to buy a company with high profits now if they don't have profitable projects in the pipeline. While keeping debt levels reasonable is always good, you realize that in real estate it can be necessary to use debt to finance purchases of land inventory. You are able to secure the following information about three companies. Company #1 Company #2 Company 3 Revenue Last $20,000,000 $20,000,000 $20,000,000 Year Profits Last Year $2,000,000 $2,000,000 $2,000,000 Cash Balance $8,000,000 $8,000,000 $8,000,000 Last Year Cash Balance $10,000,000 $2,000,000 $2,000,000 Today Total Current $12,000,000 $12,000,000 $12,000,000 Assets Last Year Total Current $11,000,000 $20,000,000 $7,000,000 Assets Today Based on this information, which company appears to meet your initial criteria of being profitable and increasing their inventory? a. None, because clearly none of them are purchasing land inventory for future projects, O b. Company #1 . Company 02 O d. Company #3

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