Practice question
Why is cash flow management critical for a seasonal coach tour operator?
- Because profit and cash are always identical figures
- Because revenue is concentrated in peak months while many costs are incurred year-round, risking liquidity shortfalls
- Because tax is only payable in cash
- Because depreciation is a cash outflow each month
Answer: B — Because revenue is concentrated in peak months while many costs are incurred year-round, risking liquidity shortfalls
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