Why Would a Firm Want to Develop a Cash Budget

question 23

Essay

Why would a firm want to develop a cash budget since it is only a projection of cash inflows and outflows over some future period of time?

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Definitions:

Sufficient Cash

A financial state indicating that a business or individual possesses enough liquid assets to meet operational expenses and financial obligations.

Dividend Amount

The sum of money paid by a corporation to its shareholders out of its profits or reserves.

Preferred Stock

Preferred stock is a type of stock that provides holders with priority over common stockholders regarding dividends and asset liquidation, typically without voting rights.

Par Value

Par value is the face value of a bond or the stock value stated in the corporate charter, below which shares cannot be issued.