-Many------contain provisions requiring firms to maintain a minimum net working capital provision.
I.loan agreements with commercial banks.
II.bond indentures.
A)loan agreements with commercial banks
B)bond indentures
C)Both statements I and II are correct
D)Neither statement I nor II is correct

Question

Quizplus · Accepted Answer

Both loan agreements with commercial banks and bond indentures may contain provisions requiring firms to maintain a minimum net working capital provision. This is done to ensure that the company has enough short-term assets to meet its short-term liabilities. Such provisions act as a form of protection for lenders, as a lack of working capital can indicate financial difficulties, and may increase the risk of default.

-Many------Contain Provisions Requiring Firms to Maintain a Minimum Net Working