It was the year there was no summer. Winter never seemed to give way to spring, and
Question:
It was the year there was no summer. Winter never seemed to give way to spring, and when spring finally did show up, it rained for weeks. Farmer Sam couldn't work his fields early enough to get his crops planted in time. Last year's weather was the same, so Sam knew the results long before fall rolled around and he was right—his harvest was well below average. Financially, last year's crop season was hard enough; another year with a below-average harvest would make the upcoming year even more difficult as the profits from his crop sales were used to pay back farm loans, and expenses for next year's crop plantings.
Sam is really in a bind and uncertain how he is going to determine his cash needs for the upcoming year. Lucky for Sam, he has a friend who is an agricultural economist and willing to meet with him pro bono and help him with a strategy for staying afloat.
You are Sam's friend.
1. Explain how a cash flow budget can help him secure a loan.
2. What questions will the loan officer find answers to in the cash flow budget?
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts