Gavin, a financial manager of a small firm, needs to determine how much his company will have to borrow in the coming months. He also needs to establish when the borrowed funds will be needed. The preparation of the cash budget will help.

Question

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The cash budget shows projected revenues, expenses, and cash balance for a specific period of time, usually one month or one quarter. It provides insight as to whether the firm needs to borrow in the short term in order to pay for expenses for the same period.

Gavin, a Financial Manager of a Small Firm, Needs to Determine