1.Refer to the Bulldog battery company’s cash budget in Table 18-7.  Explain why the company would probably not issue $1 million worth of new common stock in January to avoid all short-term borrowing during the year.

2.Accounts receivable are sometimes not collected.  Why do companies extend trade credit when they could insist on cash for all sales?

3.Inventory is sometimes thought of as a necessary evil.  Explain.

4.What are the primary variables being balanced in the EOQ inventory model?  Explain

5.What are the benefits of the JIT inventory control system?