Banking · Corporate Credit Appraisal and Working Capital Assessment
Which of the following components is specifically excluded from the calculation of Current Assets when determining the Maximum Permissible Bank Finance (MPBF) under the Second Method of lending as per the Tandon Committee guidelines?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Finished goods inventory valued at cost or market price, whichever is lower.
- 2Pre-paid expenses and advance payments made to suppliers for the purchase of capital goods.✓
- 3Receivables arising from domestic sales that are outstanding for less than six months.
- 4Raw materials and components held within the normal norms for the production process.
Correct answer
Pre-paid expenses and advance payments made to suppliers for the purchase of capital goods.
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