In forecasting a firm's cash needs for some future period
A) the percent-of-sales method is a "broad-brush" approach.
B) cash budgets are more exact than the percent-of-sales method.
C) a cash budget approach can deal effectively with both level and seasonal production schedules.
D) All of the options.

Question

Quizplus · Accepted Answer

The percent-of-sales method is a broad-brush approach, while cash budgets are more exact. A cash budget approach can deal effectively with both level and seasonal production schedules. Therefore, all of the options are correct.

In Forecasting a Firm's Cash Needs for Some Future Period