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Administration concluded the probability of one monetary flexibility crises arising was strong sufficient to justify protecting some insurance within the type of debt capacity. The possibility of two major simultaneous crises was a lot less that full insurance coverage was not required. The chance of greater than two occurring concurrently was so small that it did not justify, in management’s opinion, any further sacrifice of present advantages. Thus, site - http://m-chagall.ru/articles/pochemu-banki-dayut-krediti-s-opaskoy.html - in balancing the possible dangers of lack of resources towards the fast sacrifice of earnings, administration decided the company should keep ample financial flexibility in the type of debt reserves to protect in opposition to one $30-million downside. Extra debt reserves must be saved to go towards one other major downside or a combination of minor problems. Due to this fact, the debt reserve was set at $45 million.
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