Response to the following problem:
Loan covenants require that E-Gadget Corporation 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 owing to suppliers, and
(c) purchasing additional equipment to increase depreciation?