The preparation of a cash budget serves which of the following purposes? - 4549

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The preparation of a cash budget serves which of the following purposes?

a.To estimate the amount and timing of cash flows that are needed in order to optimize the price of the firm’s common stock

b.To calculate the amount of future cash flows that would be needed in order to achieve the optimal level of financing during the forecast period

c.To determine the amount and timing of short-term financing that would be required for the operation of a business during the forecast period

d.To estimate the amount of sales volume that would be required in order to achieve the break-even point

A cash budget is a financial estimate of future actions. The creation, of a cash budget, involves the identification of all inflows and outflows. Once this has been matched, the financing requirements can then be estimated. Financing requirements show how much a company must borrow in order to continue its operations. 

 
Solution Description

The preparation of a cash budget serves which of the following purposes?

          a.   To estimate the amount and timing of cash flows that are needed in ord