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    Question

    If the annual sales of a business are ₹X, what is the

    Maximum Permissible Bank Finance (MPBF) as per the Turnover Method?
    A X × 10% Correct Answer Incorrect Answer
    B X × 15% Correct Answer Incorrect Answer
    C X × 20% Correct Answer Incorrect Answer
    D X × 25% Correct Answer Incorrect Answer
    E X × 30% Correct Answer Incorrect Answer

    Solution

    According to the Turnover Method of Working Capital Assessment, primarily used for MSMEs with working capital needs of ₹5 crore and below, MPBF = 20% of projected annual turnover. This was recommended by the Nayak Committee for simplified credit appraisal.

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