Spontaneous liabilities include accounts payable and accrual

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Spontaneous liabilities include accounts payable (money we owe to suppliers for materials they’ve sold to us on credit) and accruals (for example, wages we owe to workers for work they’ve done over the past few days or weeks). We could increase these spontaneous liabilities, and thus reduce our need for external financing, by extending the time we take to pay our suppliers, or by paying our workers monthly rather than weekly. Do you anticipate any problems?

Reference no: EM131834898

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