Question: You are preparing some projections for Erratic, Inc., and are forecasting a reduction in sales of 1 5 % next year, with an increase of

You are preparing some projections for Erratic, Inc., and are forecasting a reduction in sales of

15 %

next year, with an increase of

15 %

the following year. You consider that all other drivers, such as accounts receivable days, accounts payable days, and inventory days, will remain the same, and there will be no change in margins. What is likely to happen to cash flow over the next

2

years?

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