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Soffit, Inc., is developing a budget for next year. Management is not pleased with the...

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Accounting

Soffit, Inc., is developing a budget for next year. Management is not pleased with the low net income the first draft of budget showed. Management is considering buying a less expensive direct material. This will reduce direct material cost by $2 per unit.

1) What effect will this lower purchase price have on the budgeted cash flows? (2 points)

2) What nonfinancial considerations need to be considered? (2 points)

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