Which one of the following combinations is most apt to cause a company that is generally financially sound to have a negative net cash inflow for a particular quarter?
A) Low fixed expenses and level monthly sales
B) A one-time asset purchase and approaching high seasonal sales
C) Highly seasonal sales and a flexible financing policy
D) A flexible financing policy and level monthly sales
E) A large cash sale and low fixed expenses

Question

Quizplus · Accepted Answer

A one-time asset purchase can cause a significant outflow of cash in a particular quarter. Additionally, approaching high seasonal sales may require increased inventory, marketing or labor costs, which can further decrease net cash inflow. Even if the company is generally financially sound, the combination of these factors can result in a negative net cash inflow for the quarter.

Which One of the Following Combinations Is Most Apt to Cause