General Studies · Working Capital Assessment
Given below are two statements, one labeled as Assertion and the other as Reason. Analyze them and choose the correct option. Assertion: While assessing the credit requirements of a manufacturing unit, the bank should prefer the Projected Turnover Method for small businesses with an aggregate credit limit up to five crore rupees rather than the traditional MPBF method. Reason: The Projected Turnover Method, based on the Nayar Committee recommendations, provides a simpler assessment of working capital by assuming that twenty percent of the projected annual turnover represents the working capital gap to be funded by the bank.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The Assertion is false but the Reason is true.
- 2The Assertion is true but the Reason is false.✓
- 3Both Assertion and Reason are true but the Reason is not the correct explanation of the Assertion.
- 4Both Assertion and Reason are true and the Reason is the correct explanation of the Assertion.
Correct answer
The Assertion is true but the Reason is false.
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