Soft Loans Refer to Loans Which Are Free of Interest

question 91

Multiple Choice

Soft loans refer to loans which are free of interest with a provision:

• A)that the country receiving the loan shall not be eligible to borrow till the repayment of the present loan.
• B)that till the time the loan is returned, the lending institution shall control the country's financial institutions.
• C)of a 10-year grace period before the country receiving the loan needs to begin repayment.
• D)that the country receiving the loan shall pay the whole sum in a single lump sum amount after the end of the grace period.
• E)that the country receiving the loan can enter into an agreement with another country to offload its loan.

---

Definitions:

Internal Rate Of Return

A financial metric used to evaluate the profitability of investments, representing the interest rate at which the net present value of costs and benefits of a project break even.

Salvage Value

The anticipated salvage value of an asset at the termination of its service life.

Annual Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity, within a year.

Opportunity Cost

The cost of opting for one choice over another, essentially the benefits you could have received by taking an alternative action.