Discuss the utility of cash budget as a tool of cash management. What are the steps involved in the constraction of a cash budget.

The following results are expected by XYZ Ltd. by quarters next year, in thousands of Tk :

The debtors at the end of a quarter are one-third of sales for the quarter. The opening balance of debtors is Tk. 30,00,000. Cash on hand at the beginning of the year is Tk. 6,50,000 and the desired minimum balance is Tk. 5,00,000. Borrowings are made at the beginning of quarters in which the need will occur in multiples of Tk. 10,000 and are repaid at the end quarters. Interest changes may be ignored. You are required to prepare :

(i) A cash budget by quarters for the year; and
(ii) State the amount of loan outstanding at the end of the year. Show your computations.