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    Question

    Under the 2nd method of lending for Maximum Permissible

    Bank Finance (MPBF), what portion of current assets can be financed by banks?
    A 50% – Current Liabilities Correct Answer Incorrect Answer
    B 60% – Current Liabilities Correct Answer Incorrect Answer
    C 70% – Current Liabilities Correct Answer Incorrect Answer
    D 75% – Current Liabilities Correct Answer Incorrect Answer
    E 90% – Current Liabilities Correct Answer Incorrect Answer

    Solution

    The Tandon Committee’s 2nd method requires promoters to fund 25% of current assets, so banks can finance only 75% minus current liabilities.

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