Current assets of a company are Rs.800 lac and other current liabilities are Rs.80 lac. What shall be the amount of Permissible Bank Finance, as per the second method of lending as suggested by the Tandon Committee?
a. Rs.720 lac
b. Rs.640 lac
c. Rs.520 lac
d. Rs.440 lac
Important Questions on Loan Policy and Loan Documentation
Internal rate of return in the context of project financing indicates:
a. The profit made by the unit
b. Benchmark prices for material transfer
c. The rate of discount at which the net present value of cash flows from the project is zero
d. Rate of rejection of project
e. a and c
The term Gross Working Capital or Working Capital represents:
a. Current assets and fixed assets
b. Current assets less current liabilities.
c. Working capital requirement after deduction of margin
d. Current assets
e. Current liabilities
Bankers make use of various ratios and concepts while appraising credit proposal. For an appraisal of which of the following, the Internal Rate of Return (IRR) is calculated:
a. Loans for larger projects
b. Working capital financing
c. Refinance Availment
d. Only by FIs for term loans
e. Non-fund based facilities
Which of the following committees did recommend the concept of working capital term loan?
a. Nayak Committee
b. SL Kapoor Committee
c. Tandon Committee
d. Chore Committee
Current assets of a company are Rs.800 lac and other current liabilities Rs.80 lac. What will be the MPBF as per the first method of lending of Tandon Committee?
a. Rs.720 lac
b. Rs.540 lac
c. Rs.520 lac
d. Rs.440 lac
At the time of renewal of working capital limits, the loan officer observed that M/s BD Enterprise's increase in long term use of funds is 80% of the increase in long term sources of funds during the year.
a. The Current liabilities would increase.
b. The Current assets would decline.
c. The Current ratio & NWC would decline.
d. The Current ratio & NWC would improve.
Under Nayak Committee recommendations, the working capital limits from the bank is the minimum of the projected annual sales:
a. 5%
b. 15%
c. 20%
d. 25%
e. 30%
The term liquid surplus used in computing working capital denotes:
a. Net working capital
b. Surplus from operations
c. Cash and bank balances
d. Surplus of long term sources over long term uses.
