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

      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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