Explain why a farm selling Christmas trees might have problems with its cash flow at certain times of the year?

Answer 1

A farm selling Christmas trees may experience cash flow problems during the off-season when there are no sales, as expenses such as maintenance, labor, and equipment costs continue year-round. Additionally, costs for planting and nurturing the trees occur long before the harvest season, creating a gap between expenses and income. Seasonal fluctuations in demand can further exacerbate cash flow issues, particularly if the farm relies heavily on a short selling window during the holiday season.