Question

s a finance manager at Outdoor Adventure Sporting Goods, Roman worries about the firm's borrowing requirements for the upcoming year. He knows the benefit of estimating the company's cash disbursements and short-term investment expectations. Facing these concerns, a(n) ________ would provide Roman with valuable information by providing a good estimation of whether the firm will need to do short-term borrowing.

Answer 1

Answer:

Cash Budget

Explanation:

A cash budget is a summarized presentation of a company's projected future cash receipts and payments. The finance section of such a budget also reveals the borrowing requirements and the mode of finance taking into consideration the repayment schedule and interest payment obligations.

A cash budget is prepared at the last following all other budgets. The budget is prepared with an objective of ascertaining future surplus or cash deficit.

In the given case, the finance manager is concerned of the borrowing requirements for the upcoming period and recognizes the benefit of estimating future cash payments and short term investments. In such case,a cash budget would provide relevant information.