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Consider the following features with reference to an economic term:
It indicates the ability of a firm to service the debt and repay it over the tenure of the loan.
  • It helps to understand and evaluate the present and emerging risks of a firm to which bank is lending.
    Which of the following terms is described in the above statements?
    • a)
      GDP Deflater
    • b)
      Interest Coverage Ratio
    • c)
      Entrepreneurship
    • d)
      Investment Promotion
    Correct answer is option 'B'. Can you explain this answer?
    Most Upvoted Answer
    Consider the following features with reference to an economic term: ...
    The loans given by banks are often necessary for the growth of companies. However, giving loans is a high-risk activity as far as banks are concerned. "Financial institutions like banks always check the ability of the corporate firms to repay the debt before sanctioning the loan. Banks use different parameters to distinguish 'strong' firms from 'weak' firms. The interest coverage ratio is a debt and profitability ratio used to determine how easily a firm can pay or cover the interest on its outstanding debt. This ratio measures how many times a company can cover its current interest payment with its available earnings. In simple terms, the interest coverage ratio of a firm is the ratio of a firm's profit after tax to its interest expense. Therefore, the correct answer is (b).
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    Consider the following features with reference to an economic term: It indicates the ability of a firm to service the debt and repay it over the tenure of the loan. It helps to understand and evaluate the present and emerging risks of a firm to which bank is lending. Which of the following terms is described in the above statements?a)GDP Deflaterb)Interest Coverage Ratioc)Entrepreneurshipd)Investment PromotionCorrect answer is option 'B'. Can you explain this answer?
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    Consider the following features with reference to an economic term: It indicates the ability of a firm to service the debt and repay it over the tenure of the loan. It helps to understand and evaluate the present and emerging risks of a firm to which bank is lending. Which of the following terms is described in the above statements?a)GDP Deflaterb)Interest Coverage Ratioc)Entrepreneurshipd)Investment PromotionCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following features with reference to an economic term: It indicates the ability of a firm to service the debt and repay it over the tenure of the loan. It helps to understand and evaluate the present and emerging risks of a firm to which bank is lending. Which of the following terms is described in the above statements?a)GDP Deflaterb)Interest Coverage Ratioc)Entrepreneurshipd)Investment PromotionCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following features with reference to an economic term: It indicates the ability of a firm to service the debt and repay it over the tenure of the loan. It helps to understand and evaluate the present and emerging risks of a firm to which bank is lending. Which of the following terms is described in the above statements?a)GDP Deflaterb)Interest Coverage Ratioc)Entrepreneurshipd)Investment PromotionCorrect answer is option 'B'. Can you explain this answer?.
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