Accounting Case-Alternatives With Strengths And Weaknesses

Essay specific features

 

Issue:

Business

 

Written by:

James R

 

Date added:

January 12, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 879

 

Was viewed:

3668 times

 

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Essay content:

This would mean we would have produced the order and be able to receive payment for the order a day early without having incurred any overtime. Weaknesses of Action #1: If the materials are purchased on Wednesday, we would have to write a check. That means the cash flow from operating activities for this year will be much lower, which our stockholders won’t like...
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Also, our acid test ratio will go down from 1.01:1 to .90:1, so our creditors may be upset. Proposed Alternative Action #2: Order the raw materials on the following Tuesday and work overtime to complete the order. Strengths of Action #2: The purchase of the raw materials would not affect our acid-test ratio for the current year, so our creditors would not be upset with us...
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