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Minimize Negative Cash Flow in a Deal

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Please help with the following problem.

Congratulations! Your small company was just awarded a lucrative contract to provide hundreds of widgets to the US Government. If you perform well, you'll be on "easy street" with all the follow-on business. It will take you 6 months to produce and deliver the units. The US Government will not provide up front payments (payments prior to delivery) and, is notoriously late on paying "net 30" invoices.

a. What can you do to minimize the negative cash flow of this deal?

b. How are you going to keep your company afloat until you get paid?

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Solution Summary

This posting helps with a finance problem. The expert determines how to minimize negative cash flow in a deal. How to keep a company afloat until you get paid is determined.

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a. What can you do to minimize the negative cash flow of this deal?

Negative cash flows during the 6 months it takes to produce and deliver the units until the company can collect from the US Government, can be minimized by:
1. Negotiate for a longer ...

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