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What Is the Purpose of a Letter of Commitment

Question 30

Multiple Choice

What is the purpose of a letter of commitment?


A) It classifies the borrower's assets in terms of retention by the business.
B) It establishes requirements to maintain inventory and book debts at specified levels.
C) It sets out in a summary manner the basic terms on which the lender is prepared to make the loan.
D) It sets out the borrower's obligation to provide financial reports and maintain specified debt/equity ratios.

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