Why Is It Necessary for a Business Firm to Put

question 169

Multiple Choice

Why is it necessary for a business firm to put up collateral when it takes out a loan?

• A) So that the bank can keep a portion as advance payment on the loan
• B) To show the bank that the business is big enough to require the loan
• C) To assure the bank that loan payments will be made as promised
• D) So the financial managers know dates of payment
• E) So that the accounting people can generate accurate financial statements