Term Loan Assessment Quiz
Authored by AMOL POPALGHAT
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of a term loan appraisal?
To calculate the tax liability of the borrower
To evaluate the market demand for the borrower's products
To determine the credit score of the borrower
To assess the ability of the unit to repay the loan and interest from surplus generated by utilizing fixed assets
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the formula for Debt Service Coverage Ratio (DSCR)?
(EBITA + Depreciation + Annual Interest on Term Loan) / (Annual Instalments on Term Loan + Annual Interest on Term Loan)
(Gross Profit + Depreciation + Annual Interest on Term Loan) / (Annual Instalments on Term Loan + Annual Interest on Term Loan)
(Net Profit After Tax + Depreciation + Annual Interest on Term Loan) / (Annual Instalments on Term Loan + Annual Interest on Term Loan)
(Profit Before Tax + Depreciation + Annual Interest on Term Loan) / (Annual Instalments on Term Loan + Annual Interest on Term Loan)
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of a Sensitivity Analysis in term loan assessment?
To evaluate the project's internal rate of return
To determine the interest coverage ratio of the project
To calculate the break even point of the project
To assess the impact of variations in project parameters on the project's viability
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the Break Even Point (BEP) in the context of term loan assessment?
The point at which the unit reaches its maximum capacity
The level of production/sales at which the unit makes a loss
The point at which the unit achieves maximum profitability
The level of production/sales at which the unit neither makes profit nor loss
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of an Interest Coverage Ratio in term loan assessment?
To measure the ability to pay interest from the earnings of the firm
To calculate the break even point of the project
To assess the impact of variations in project parameters on the project's viability
To evaluate the project's internal rate of return
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of a Techno Economic Viability (TEV) study in project financing?
To assess the technical feasibility and economic viability of the project
To determine the interest coverage ratio of the project
To calculate the break even point of the project
To evaluate the project's internal rate of return
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the acceptable average Debt Service Coverage Ratio (DSCR) for a project?
1.00
2.00
1.75
1.25
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