Considering the 5 C's of Credit, What Does Capacity Signify

question 117

Multiple Choice

Considering the 5 C's of credit, what does capacity signify?

• A) The customer's willingness to meet credit obligations.
• B) The customer's ability to meet credit obligations out of operating cash flows.
• C) The customer's financial reserves.
• D) A pledged asset in the case of default.
• E) General economic conditions in the customer's line of business.

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Definitions:

Low-Income DVCs

Developing countries characterized by low levels of income per capita, often facing challenges in economic development.

Agriculture

The practice of cultivating land and raising crops or livestock for food, fiber, and other products.

Per Capita Incomes

The average income earned per person in a given area (city, region, country) in a specified year.

Equally Distributed

A situation where resources, wealth, or opportunities are shared uniformly among all members of a population.