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Franchised BUsiness's cash flow Questions
Read the Case Study – Your Franchised Business’s Cash Flow at the end of Chapter 11. Be sure to review Figure 11-8 for the Projected Cash Flow, and then answer the following questions:
- Why is a cash flow projection considered an important tool to both the franchisor and the franchisee?
- Explain why the net cash flow figure is negative in October, November, and April of the projected year.
- Given the total amount of cash available, does the anticipated disbursement of cash appear to be realistic?
- Explain how this franchised business can have a total net profit in excess of $20,000, while the net cash flow is less than $11,760.