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    Question

    In the Tandon Committee Method, what is the maximum

    permissible bank finance (MPBF) calculated as?
    A (CA - OCL) - 25% of WCG Correct Answer Incorrect Answer
    B (CA - OCL) - 25% of CA Correct Answer Incorrect Answer
    C (CA - OCL) - CCA - 25% (CA - CCA) Correct Answer Incorrect Answer
    D (CA + OCL) - 10% of WCG Correct Answer Incorrect Answer
    E (Current Assets) - 50% of Current Liabilities Correct Answer Incorrect Answer

    Solution

    The first method for calculating MPBF under the Tandon Committee approach involves subtracting 25% of the working capital gap (WCG) from the difference between current assets (CA) and other current liabilities (OCL). This method helps determine the proportion of working capital that the bank can finance.

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