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Consider the dilemma you might someday face if you are the chief financial officer of a company that is struggling to maintain a positive cash
Consider the dilemma you might someday face if you are the chief financial officer of a company that is struggling to maintain a positive cash flow, despite the fact that the company is reporting a substantial positive net income. Maybe the problem is so severe that there is often insufficient cash to pay ordinary business expenses, like utilities, salaries, and payments to suppliers. Required: Discuss the paradox of this situation. How can a company have a positive net income, but is not able to pay ordinary business expenses? Consider the dilemma you might someday face if you are the chief financial officer of a company that is struggling to maintain a positive cash flow, despite the fact that the company is reporting a substantial positive net income. Maybe the problem is so severe that there is often insufficient cash to pay ordinary business expenses, like utilities, salaries, and payments to suppliers. Required: Discuss the paradox of this situation. How can a company have a positive net income, but is not able to pay ordinary business expenses
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