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In the Context of Cash Flow Analysis, Why Is a Period

Question 46

Multiple Choice

In the context of cash flow analysis, why is a period of rapid growth considered to be one of the most dangerous times for an entrepreneurial business?


A) Because it can result in the business ordering and paying for additional orders while there is no cash coming into the firm
B) Because it is difficult to accurately forecast the cash flow of the firm in this situation
C) Because a rapid slump in sales almost always comes after a rapid and unexpected growth
D) Because the employees of small firms are rarely equipped to cope with a rise in their workload

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