Capacity, Which Is One of the Traditional "Five Cs" of Credit

question 69

Multiple Choice

Capacity, which is one of the traditional "five Cs" of credit analysis, refers to

• A)the general economic climate and its effect on the applicant's ability to pay
• B)the willingness of the applicant to meet its financial obligations
• C)the financial strength of the applicant (i.e., net worth)
• D)the ability of an applicant to meet its financial obligations

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Definitions:

Annual Operating Expenses

The total costs associated with running a business, organization, or project within a given fiscal year, excluding the cost of goods sold.

Deejay

A person who selects and plays recorded music for an audience, traditionally in settings like radio stations or nightclubs.

External Environment

Factors and forces outside an organization that affect its performance, including economic, social, technological, legal, and political elements.

Organizational Planned Change

A deliberate process initiated by an organization to improve or alter its current state for better results.