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| Topic: |
Business
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| Number of pages / Number of words: |
9 / 2265 |
Essay's paper body
Restrictive policies are the opposite of flexible polices: low cash reserves, low inventory, and no credit sales. A restrictive policy could result in shortage costs. Shortage costs occur when current assets are low which result in payment defaults or creating a need to borrow (Ross, 2004).
Lawrence Sports is required to maintain a minimum of a $50,000 cash balance in the bank at all times (University of Phoenix, 2007)...
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This needs to be considered in determining the ideal reserve and reviewing cash budgeting. Cash budgeting includes examining the timeline of cash inflows and cash outflows and reviewing the sources and uses of cash. Currently, Lawrence Sports is faced with delayed payments from their primary customer, Mayo Stores, and a need to make payments to their suppliers...
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