1. You would maintain larger quantities of inventory if you are worried about: All of the above Loss due to theft or fire Insurance Cost Losing customers.
2. Would you set different dividend policies based on the perceived demographic of your investor? Does the firm's life cycle impact this decision?
3. What is the advantage of giving credit to customers? Increase in bad debts. Customers using cash discount instead of paying full price. Financing needs associated with paying the supplier. Increase in number of units sold.