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    Question

    Which of the following methods for calculating the

    Maximum Permissible Bank Finance (MPBF) considers the permanent level of current assets, also known as the Core Current Assets (CCA)?
    A First Method under the Tandon Committee Correct Answer Incorrect Answer
    B Second Method under the Tandon Committee Correct Answer Incorrect Answer
    C Third Method under the Tandon Committee Correct Answer Incorrect Answer
    D Simplified Turnover Method Correct Answer Incorrect Answer
    E Cash Budget Method Correct Answer Incorrect Answer

    Solution

    ┬а The Third Method under the Tandon Committee specifically accounts for the Core Current Assets (CCA), which represents the minimum level of current assets a business must maintain to continue operations. This method is the most stringent and helps banks assess the true working capital requirements of a firm.

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