Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Business Arithmetic

Question:
Which of the following statement (s) is/are NOT true about the 'cash flow projection'?
Options:
Cash Flow Projection shows how cash is expected to flow in and flow out of the business.
It's an important tool for cash management
Cash Flow Projection gives no idea of how much capital investment a business idea needs as investment is dependent on several factors.
None of the above
Correct Answer:
Cash Flow Projection gives no idea of how much capital investment a business idea needs as investment is dependent on several factors.
Explanation:
Cash Flow Projection shows how cash is expected to flow in and out of a business. It's an important tool for cash management, letting you know when your outflows are too high or when you might want to arrange short term investment to deal with a cash surplus. As part of your business plan, a Cash Flow Projection will give you a much better idea of how much capital investment your business idea needs.