N. S. Toor Solutions for Chapter: Loan Policy and Loan Documentation, Exercise 13: TEST YOUR SELF

The working capital limit sanctioned by banks, particularly the cash credit limit, is repaid out of _____.

Which among the following does not match?

Formula for calculating drawing power in cash credit accounts is:

a. Value of security less margin

b. Balance in the account plus margin

c. Value of security plus margin

d. None of the above

Current assets of a company are Rs.800 lac and other current liabilities Rs.80 lac. If the amount of networking capital is Rs.170 lac what will be the amount of excess borrowing, as per 2nd method of lending:

a. Rs.120 lac

b. Rs.80 lac

c. Rs.50 lac

d. Rs.30 lac

Under the Nayak Committee's Turnover method for working capital, the current ratio is:

Under 2nd method of lending of Tandon Committee, the current ratio is:

What does the term 'kite-flying' means?

Banks sanctions a Working Capital term loan for which of the following purposes?

a. To provide a margin for the term loan

b. To provide a margin for working capital

c. To provide money for daily expenses of all kinds

d. To provide funds for meeting urgent expenses of working capital

e. None of the above