AEM222.1 Spring 2008 Pedro David Pérez Description of Assignment – Butler Lumber The Butler Lumber Company has been expanding rapidly for several years. Increases in working capital requirements have outrun the capacity of the company to generate funds from internal sources. Part of the company’s available funds has also been used by Mr. Butler to buy out his partner, thus further increasing the financial pressure on the company. The company has been forced to forgo taking discounts on accounts payable and to borrow in increasing amounts from its bank to maintain its expansion. Mr. Butler must decide whether to continue to expand and, if so, how to raise the necessary funds. The alternative that he is actively considering is to seek a new bank connection from which he can borrow larger, but secured, amounts than from his present bank. The bank
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