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A cash budget is usually a forecast of receipts and payments of an enterprise, drawn at small intervals of time, say monthly, weekly etc. Financing Seasonal activities: Peak and Non-Peak levels of WC requirements for seasonal activities can be effectively worked out by employing the cash budget technique. Activities depending on agriculture are generally seasonal in nature. Credit decisions in respect of these activities are usually taken on the basis of carefully drawn cash budgets for a year. Limits may go high during the peak activity of a year and may go down during the non-peak period
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