Why Do Banks Require That Business Loan Applications Be Accompanied

question 42

Multiple Choice

Why do banks require that business loan applications be accompanied by cash budgets?

• A) To determine how much cash to loan
• B) To determine whether the loan will be a short-term or long-term loan.
• C) To determine whether the business will be profitable
• D) To calculate the expected return it receives from giving the loan

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Definitions:

Intrinsic

Referring to something that is inherent or essential to the nature of something else, often used to describe values or properties that are an integral part of an object or concept.

Extrinsic

Not inherent or essential, coming from the outside, or external to something.

Heisenberg Uncertainty Principle

A fundamental theory in quantum mechanics stating that it is impossible to simultaneously determine both the position and momentum of a particle with absolute precision.

Rational Freedom

The ability to make choices based on reasoning and logical deliberation, free from irrational forces or constraints.