The cash budget method for sanction of working capital limits is useful in case of which of the following?
(a) Service sector activities
(b) Seasonal industries
(c) Software development
(d) Film production
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Only (a), (b) and (c)
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Only (b), (c) and (d)
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Only (a), (c) and (d)
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All of the above
D
Correct answer
Explanation
Under the cash budget method, monthly cash inflow and outflow statements are prepared and the highest gap between the two becomes the basis of sanction of credit limit. Banks make use of cash budget method in case of:
(a) Seasonal industries
(b) Software development
(c) Film production
(d) Service sector activities, including construction activities