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Without the cash being fed into the company through financing, there would be no way for the company to pay the expenses such as administration, materials, lease or income taxes. A company cannot stay continue to operate if there are more expenses than there is revenue. By acquiring outside financing, the company "buys" itself time to better its financial standing and gives them the cash to pay the expenses that are needed to keep the business afloat.
C. What is the minimum line of credit that CBM will need?
Based on our findings, it appears that the company will need to borrow a total of $220,750 from outside sources...
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