Question

What does the concept of "Drawing Power" refer to in a

Q: Answer-What does the concept of 'Drawing Power' refer to in a Cash Credit facility?

Drawing Power DP is the amount a borrower can withdraw from the sanctioned limit based on the current value of stock and receivables, adjusted by the banks margin policy

Cash Credit facility?

A The total amount of money a borrower can withdraw from the bank.

B The value of assets pledged by the borrower to secure the loan.

C The amount that a borrower can withdraw from the sanctioned credit limit based on the latest stock and receivables statement.

D The repayment schedule agreed upon for the loan.

E The total credit limit sanctioned by the bank to the borrower.

Practice Next

More Financial Management Questions

……………………….is the prominent member of 1:1 type group in which one tetrahedral and one octahedral layer is present.
...
The word “ Communication” is derived from which language
Which one of the following mineral elements plays an important role in biological nitrogen fixation:
Which of the following fatty acid is majorly present in Coccus nucifera?
Phomopsis blight is a disease of which crop?
Barberry bush is the alternate host of _______
Mostly plants absorb micronutrients in
The ultimate source of production of organic compound:
Durum/ Macroni wheat (Triticum durum) is:
The headquarter of Cotton Corporation of India is located at

What does the concept of "Drawing Power" refer to in a

Solution