A negative cumulative cash surplus indicates a borrowing need by the firm.

Negative Cumulative Cash Surplus

A financial situation where the cumulative cash flows from a project or business are negative, indicating a deficit.

Borrowing Need

The necessity for an individual or organization to raise funds through loans or debt issuance to finance its operations or investments.

Become acquainted with the fundamental aspects and crucial importance of cash budgeting in finance management.
Recognize different forms of short-term financing and their implications for financial planning.

Verified Answer

Final Answer :

True

Explanation :

A negative cumulative cash surplus indicates that the firm's outflows exceed its inflows, suggesting the need to borrow funds to cover the shortfall.

Learning Objectives

Become acquainted with the fundamental aspects and crucial importance of cash budgeting in finance management.
Recognize different forms of short-term financing and their implications for financial planning.