Assume That You Are Running a Small Business and You

question 27

Multiple Choice

Assume that you are running a small business and you estimate that you will run out of cash in two months. Which of the following could you do to avoid running out of cash?

• A) Arrange to pay accounts payable later.
• B) Offer customers a discount for paying more quickly.
• C) Reduce raw materials.
• D) All of these will help to increase cash available.
• E) None of these (a, b, or c) will help to increase cash.

---

Definitions:

Financial Difficulties

A situation where an individual or organization struggles to manage financial obligations, potentially leading to insolvency.

Bank Loan

A sum of money lent by a bank to a borrower with the expectation of being paid back with interest.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and certain rights.

Minority Shareholder

A shareholder owning less than half of the total shares, and consequently having less influence over corporate decisions.