"A firm's peak borrowing needs will probably be overstated if it bases its monthly cash budget on the assumption that both cash receipts and cash payments occur uniformly over the month but in reality receipts are concentrated at the beginning of each month." True or False

True

Explanation:

If the firm borrows on the assumption that it will be receiving cash throughout the month this means that they are borrowing because they would like to offset costs as they come in then pay as they receive money.

If they however receive all the money that they were to receive for the month in the beginning of the month, there would be no need to borrow as much to offset costs because the money received will act as a reserve which will offset the payments that will be uniform throughout the month.