A revolving line of credit gives a borrower access to a predetermined maximum amount of credit, but funds are only received when they are needed.

True

False

$1$ point

refers to a firm's ability to generate sufficient cash from product sales to repay the loan plus interest according to the contracted financing terms.

Profitability

Liquidity

Repayment Capacity

Solvency

$1$ point

If Seedy Farms borrows $$200,000$ on June $1$st at $7\%$ annually, the cashflow budget projects $$125,000$ from crop sales available for loan repayment on October $1$ st and an

additional $$25,000$ available for repayment on November $1$ st$.$ What is the total interest obligation?

$$427$

$$5,125$

$$6,434$

$$1,755$

$1$ point

Chemicals, additives, fertilizers, and seeds are not good loan collateral because they are not easily$-$

Reclaimable

Transferable

Measurable

Exchangeable