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Unformatted text preview: I-21.04 1 of 2 1 of 2 Christina Chase was appointed CEO of Oshkosh Systems at the end of 20X3. Oshkosh manufactures several popular products, but is only achieving marginal financial success. Christina's first mission is to review operations and attempt to refine processes to improve financial condition and profitability. On the following page are the budgeted financial statements for the upcoming year. Christina has identified three specific strategies to improve performance as follows: 1 Adopt strategies to reduce ending inventory levels by half. Assume that the 80% of this reduction will offset by a reduction in notes payable, and 20% will be offset by a reduction in accounts payable. The debt reduction is expected to decrease interest incurred and paid by $150,000. Any benefit to income will be offset by a 40% tax cost, and the tax effect will result in a corresponding change in cash....
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- Spring '11