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    • Question

      A term loan of ₹80 crore is secured by Plant &

      Machinery valued at ₹90 crore and land valued at ₹30 crore. The forced sale value of machinery is assessed at 50%, while land is taken at full value. The bank wants to compute security coverage on FSV basis. What is the effective security coverage ratio?
      A 0.94 Correct Answer Incorrect Answer
      B 1.05 Correct Answer Incorrect Answer
      C 1.26 Correct Answer Incorrect Answer
      D 1.47 Correct Answer Incorrect Answer
      E 1.68 Correct Answer Incorrect Answer

      Solution

      FSV = 45 + 30 = 75. Coverage = 75 / 80 = 0.94

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