Question
Read the below and then provide a short answer to the questions: As a potential creditor, you are talking to the CFO of Captain Bob's
Read the below and then provide a short answer to the questions:
As a potential creditor, you are talking to the CFO of Captain Bob's Bait and Tackle. She is telling you the firm's plans for the money they will receive from their creditors (lenders) in the near future. She says the firm is planning to sell some of their best bait and tackle shops (relatively safe sources of income year after year) and combine the sale money and the new money from its creditors to enter into a very large and speculative (risky) adventure with a new start up technology company. If the investment is a winner, Captain Bob's shareholders will do very well.
As a potential creditor (lender) to Captain Bob what is your view of Captain Bob's plans? Would you be in favor of them or not? Why?
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