The Basic Factors to Be Evaluated in the Credit Evaluation

question 16

Multiple Choice

The basic factors to be evaluated in the credit evaluation process,the five Cs of credit,are:

• A)conditions, control, cessation, capital, and capacity.
• B)conditions, character, capital, control, and capacity.
• C)capital, collateral, control, character, and capacity.
• D)character, capacity, control, cessation, and collateral.
• E)character, capacity, capital, collateral, and conditions.

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Definitions:

Division of Labor

The division of separate components of a manufacturing procedure or task among different individuals for the purpose of increasing efficiency.

Sole Proprietorship

A business structure owned by a single individual, where the owner has unlimited liability.

Corporation

A legal entity created by individuals, shareholders, or shareholders, with rights and liabilities distinct from those of its members, recognized as such under law.

Partnership

A business setup legally established by two or more partners who divide management duties and profits.