A banker is analyzing a company which operates in the automotive industry. Which of the following will likely be the banker's most important consideration in determining whether the company should receive a loan?
A) The automotive plant's capacity.
B) Inflation has been consistently high for several years.
C) The company has state-of-the-art automated equipment which enhances the efficiency of its operating process.
D) The company has a large amount of interest payments related to other outstanding loans.

Question

Quizplus · Accepted Answer

The banker will be most concerned with the company's existing debt obligations and its ability to service additional debt, as indicated by the large amount of interest payments related to other outstanding loans. This directly affects the company's creditworthiness and risk of default.

A Banker Is Analyzing a Company Which Operates in the Automotive