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Review the Cash Budget for Stars and Stripes Clothing shown in Figure 16-4 of the textbook. Identify what you would do as the financial manager
Review the Cash Budget for Stars and Stripes Clothing shown in Figure 16-4 of the textbook. Identify what you would do as the financial manager for this company with the excess cash that the company projects for the second and fourth quarters in the cash budget. Consider the Cash Budget for Stars and Stripes Clothing shown in Figure 16-4 of the textbook and assume that the carefully thought through budget came out completely different due to an unexpected economic downturn. The negative event resulted in a significant decrease in sales, which had the company end with a loss in the first three quarters of the year: $7,000 loss in first quarter, $11,000 loss in the second quarter, and a $16,000 loss in the third quarter. Explain what you would do as the financial manager for this company to overcome the three quarters of losses and help the company through this period of crisis. Explain the circumstances in which financial managers within a large corporation would rather sell stock than bonds to obtain long-term financing, and under what circumstances financial managers would rather sell bonds than stock to obtain long-term financing
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