Credit policies factors affecting cash outflow

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Credit policies. Factors affecting cash outflow: Research and development, capital investment, and promotional costs during the introduction stage. Obsolescent inventory is actually cash outflow without future cash inflow to recover the cost.
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491 4. Careful cash budgeting and monitoring. Matching cash flows from products in the growth stage with the cash outflows of products in the research and development stage. Establishing good banking relationships. Setting up flexible lines of credit to cover short-term borrowing needs. Aggressive accounts receivable management. Tight control of materials purchasing. Aggressive inventory management. Strict cost control. Timely decisions on inventory liquidation as product life cycles end.
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