The preparation of a cash budget serves which of the followingpurposes? a. To estimate the amount andtiming of cash flows that are needed in order to optimize the priceof the firms common stock b. To calculate the amount offuture cash flows that would be needed in order to achieve theoptimal level of financing during the forecast period c. To determine the amount andtiming of short-term financing that would be required for theoperation of a business during the forecast period d. To estimate the amount ofsales volume that would be required in order to achieve thebreak-even point A cash budget is a financial estimate of futureactions. The creation of a cash budget involves theidentification of all inflows and outflows. Once this has beenmatched the financing requirements can then be estimated.Financing requirements show how much a company must borrow in orderto continue its operations.