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Which of the following can be a threat to operational financing

a. swift expansion plans
b. low inventory needs
c. a team with a high asset base
d. low development costs

1 Answer

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Final answer:

Swift expansion plans can be a threat to operational financing as they may require substantial financial resources that could strain cash flows and necessitate major borrowing or issuing of stock.

Step-by-step explanation:

The question pertains to operational financing which is the process of securing capital to fund the day-to-day operations and growth initiatives of a company. In the context of the provided options, swift expansion plans can pose a significant threat to operational financing. This is due to the large outlay of financial resources that are required in a short period of time which can strain cash flows and may require substantial borrowing or dilution of ownership through issuing new stock.

Low inventory needs, a team with a high asset base, and low development costs generally do not threaten operational financing. In fact, these factors can contribute positively by reducing the need for working capital, enhancing the asset base of the company to potentially secure financing, and minimizing expenses associated with development, respectively.

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