A banker is analyzing a company that operates in the petroleum industry.Which of the following might be a major consideration in determining whether the company should receive a loan?
A)The petroleum industry suffers from political pressures concerning the selling price of its products.
B)Inflation has been high for several years in a row.
C)All companies in the petroleum industry use the same accounting principles.
D)The company has a large amount of interest payments related to many outstanding loans.

Question

Quizplus · Accepted Answer

The company's existing large amount of interest payments and outstanding loans could affect its ability to repay additional debt, making it a major consideration for the banker.

A Banker Is Analyzing a Company That Operates in the Petroleum