Question
A term loan outstanding is ₹90 crore. Security comprises Plant valued at ₹100 crore with FSV 50% and land valued at ₹40 crore with FSV 80%. The bank wants to compute coverage on forced sale value basis. What is the security coverage ratio?
Solution
Total FSV = 50 + 32 = 82. Coverage = 82 / 90 = 0.91.
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