A firm's peak borrowing needs will probably be overstated if it bases its monthly cash budget on uniform cash receipts and disbursements, but actual receipts are concentrated at the beginning of each month.

Question

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If a firm's actual receipts are concentrated at the beginning of each month, its borrowing needs may be lower than expected if it bases its cash budget on uniform cash receipts and disbursements. This is because the firm may have sufficient cash on hand at the beginning of the month to cover its expenses for a longer period, reducing the need for borrowing.

A Firm's Peak Borrowing Needs Will Probably Be Overstated If