A company that produces racing motorbikes has several models that sell well within the motorcycle racing community and that are very profitable for the company.Despite having a profitable product,why must this company take care to ensure that it has sufficient cash on hand to meet its obligations?

Question

Quizplus · Accepted Answer

Even though the current models are profitable, the company cannot rely solely on them to sustain its business in the long run. Developing and launching new models is necessary to keep up with changing market demands and competition. However, new models require significant investment before they can generate any revenue. Therefore, the company must have sufficient cash on hand to fund the development and launch of new models while still meeting its obligations to suppliers, employees, and other stakeholders.

A Company That Produces Racing Motorbikes Has Several Models That