Crafty Resources Ltd. is a new creator and publisher of children’s craft kit books. It has created kits for dolls, twirled paper crafts, paper doll clothes, and so on. The publishing industry is characterized by lengthy credit periods for bookstores and a lack of credit granting on the part of paper suppliers and commercial grade copy and binding machine manufacturers.
Required:
Determine the cash flow pattern that you expect Crafty Resources to have in its first year of operation and explain your rationale.