New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    In the context of corporate finance, companies often

    utilize various sources of funding to support their long-term investments and operations. These sources of funding, referred to as long-term borrowings. Among the options provided, identify which one does not qualify as a long-term borrowing for a company:
    A Debentures Correct Answer Incorrect Answer
    B Term loans Correct Answer Incorrect Answer
    C Loans repayable on demand from banks Correct Answer Incorrect Answer
    D Long-term finance lease obligations Correct Answer Incorrect Answer
    E Corporate bonds Correct Answer Incorrect Answer

    Solution

    Loans repayable on demand from banks are considered short-term borrowings because they are due for repayment at any time upon the bank's request. This contrasts with long-term borrowings like debentures, term loans, long-term finance lease obligations, and corporate bonds, which have fixed repayment schedules extending over several years.

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