Description
Katie Murphy is preparing for a meeting with her banker. Her business is finishing its fourth year of operations. In the first year, it had negative cash flows from operations. In the second and third years, cash flows from operations were positive. However, inventory costs rose significantly in year 4, and cash flows from operations will probably be down 25%. Murphy wants to secure a line of credit from her banker as a financing buffer. From experience, she knows the banker will scrutinize operating cash flows for years 1 through 4 and will want a projected number for year 5. Murphy knows that a steady progression upward in operating cash flows for years 1 through 4 will help her case. She decides to use her discretion as owner and considers several business actions that will turn her operating cash flow in year 4 from a decrease to an increase.
Required
- Identify two business actions Murphy might take to improve cash flows from operations.
- Comment on the ethics and possible consequences of Murphy’s decision to pursue these actions.

Explanation & Answer

Hello, I enjoyed answering your question. If not satisfied, you can ask for a revision. Remember to invite me to your future questions. Goodbye for now!
1
Ethics and Accounting
Student’s Name
Institutional Affiliation
Instructor’s Name
Course
Date
2
Ethics and Accounting
Question 1.
i.
Lease, do not buy.
Katie Murphy should adopt the strategy of leasing her business equipment, and supplies
since ...

Review
Review




24/7 Homework Help
Stuck on a homework question? Our verified tutors can answer all questions, from basic math to advanced rocket science!






Similar Content
Related Tags
Where'd You Go Bernadette
by Maria Semple
The Hunger Games
by Suzanne Collins
Murder on the Orient Express
by Agatha Christie
The Power of Habit - Why We Do What We Do in Life and Business
by Charles Duhigg
The Lost Man
by Jane Harper
The 7 Habits of Highly Effective People
by Stephen R. Covey
The Atlantis Gene
by S. A. Beck
Wuthering Heights
by Emily Brontë
The Secret Life of Bees
by Sue Monk Kidd






