When banks make loans to firms,which is LEAST likely to be of concern to them?
A) the amount of cash on hand
B) the strength of the firms other assets
C) the size of a firm's net worth
D) a firm's intended use of the money

Question

Quizplus · Accepted Answer

Banks are primarily concerned with the ability of the firm to repay the loan, therefore the intended use of the money is not as significant as the firm's financial health and ability to generate profits. However, if the intended use of the money is not in line with the firm's objectives or could expose the bank to significant risk, then it may be a concern.

When Banks Make Loans to Firms,which Is LEAST Likely to Be