How could the cash budget be used when negotiating the terms of a bank loan?

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How could the cash budget be used when negotiating the terms of a bank loan?

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How could the cash budget be used when negotiating the terms of a bank loan?

Explanation & AnswerSolution by a verified expert

Explanation

If a bank can see clearly how a loan will be repaid from a cash budget, the company will have an advantage when negotiating the terms of the loan.

Verified Answer

The cash budget can be used when the terms of a bank loan are negotiated because banks will need to know how much a company expects to need, when funds will be needed, and most importantly, when will the loan be repaid.

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