Hau Lee Furniture, Inc., described in Example 1of this chapter, finds its current profit of $10,000 inadequate.The bank is insisting on an improved profit picture prior toapproval of a loan for some new equipment. Hau would like toimprove the profit line to $25,000 so he can obtain the bank’sapproval for the loan.a) What percentage improvement is needed in the supplychain strategy for profit to improve to $25,000? What isthe cost of material with a $25,000 profit?b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales befor profit to improve to $25,000?

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Cash Outflow

The term "cash flow" basically means the flow of money in and out of business. The cash flow usually takes place from operational, investing, and financing activities. The cash flow normally denotes the amount of cash that is transferred either into the business as positive cash flows or out of business as expenses with regards to operating, investing, and financing activities.