Author Question: What is speculative production and how does it impact a firm's financial ... (Read 98 times)

leo leo · **on:** Jul 14, 2018

What is speculative production and how does it impact a firm's financial planning?

Question 2

The need for esteem may be satisfied through personal accomplishments, promotion to more responsible positions, and honors and awards.

Indicate whether the statement is true or false

abctaiwan · **Reply #1 on:** Jul 14, 2018

Answer to Question 1

Speculative production refers to the time lag between the actual production of goods and when the goods are sold. Speculative production may create a need for short-term financing since the upfront costs may need to be covered prior to sale and receipt of payment for a firm's products or services. Financial planning for speculative production may be challenging due to the instability and projection of unsold products or services. This may lead to cash flow problems and the need for short-term financing. Note: The preceding question asks students for more details about cash flow.

Answer to Question 2

True