Question: Need help with question 3 and 4 only LO2 D13-18. Management Application: Cash Flow Improvement with Operating Decisions Assume that you are the CEO of

Need help with question 3 and 4 only LO2 D13-18. Management Application:Need help with question 3 and 4 only

LO2 D13-18. Management Application: Cash Flow Improvement with Operating Decisions Assume that you are the CEO of a small publicly traded company. The company's stock price has fallen recently and you believe that the market does not fully understand the company's potential. You wonder about ways to increase cash flow for the year. At your direction, your CFO provides you with the fol- lowing recommendations that are designed to increase your cash flow in the current period. Your hope is that these will bring the stock price back up to where you believe it should be. 1. Lengthen the time taken to pay accounts payable (lean on the trade) to increase net cash flows from operating activities. 2. Cut spending on R&D by 10%, which improves cash flow but also operating performance measures. 3. Decrease discretionary spending on marketing and promotion activities. 4. Offer deep discounts (during the last quarter of the fiscal year only) to favored customers to provide incentives for them to increase the quantities they purchase from you in the current period. 5. Delay certain capital expenditures to push the cash outflow to a subsequent period. Evaluate each of the CFO's recommendations. In your evaluation, consider whether each recommenda- tion will increase free cash flow in the short-term and the long-term. Will any of these ideas improve the stock price

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