Loan covenants require that E-Gadget Corporation (ECG) generate $200,000 cash from operating activities each year....
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Loan covenants require that E-Gadget Corporation (ECG) generate $200,000 cash from operating activities each year. Without intervening during the last month of the current year. EGC will generate only $180,000 cash from operations. What are the pros and cons of each of the following possible interventions: (a) pressuring customers to pay overdue accounts (b) delaying payment of amounts owed to suppliers (c) purchasing additional equipment to increase depreciation?
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