Banking · Working Capital Assessment
In the context of the Cash Budget Method for assessing working capital limits for a borrower, which of the following statements accurately reflects the primary focus and applicability of this method?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It calculates the maximum permissible bank finance (MPBF) based on the borrower's installed capacity.
- 2It is primarily used for large borrowers with a minimum fund-based working capital limit of 10 crore rupees.
- 3It assesses the working capital gap based on the projected level of current assets and current liabilities.
- 4It is generally suitable for assessing peak and non-peak requirements of cyclical and seasonal industries.✓
Correct answer
It is generally suitable for assessing peak and non-peak requirements of cyclical and seasonal industries.
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