Dell Computer Corporation has receivables of $2.5 million and inventory worth $1.8 million. The company plans to borrow $2 million for working capital purposes from First National Bank. In evaluating the loan request, the bank should place the most emphasis on:

Question

Quizplus · Accepted Answer

The going-concern assumption is crucial for the bank as it assesses whether Dell Computer Corporation will continue its operations long enough to repay the loan.

Dell Computer Corporation Has Receivables of $2