The ABC Company borrows money to expand their funiture plant. Which of the following statements are very likely true? (Select all that apply) This loan is secured by the value of the plant. This is a short-term capital investment. The loan is made based on forecasted future returns from the investment. This loan is secured by other business assets.​

I. This loan is secured by the value of the plant.

II. This loan is secured by other business assets.

III. The loan is made based on forecasted future returns from the investment.

Explanation:

A loan can be defined as an amount of money that is being borrowed from a lender and it is expected to be paid back at an agreed date with interest.

Generally, the financial institution such as a bank lending out the sum of money usually requires that borrower provides a collateral which would be taken over in the event that the borrower defaults (fails) in the repayment of the loan.

A credit score can be defined as a numerical expression between 300 - 850 that represents an individual's financial history and credit worthiness. Therefore, a credit score determines the ability of a borrower to obtain a loan from a lender.

This ultimately implies that, the higher your credit score, the higher and better it is to obtain a loan from a potential lender. A credit score ranging from 670 to 739 is considered to be a good credit score while a credit score of 740 to 799 is better and a credit score of 800 to 850 is considered to be excellent.

In this scenario, the ABC Company borrows money to expand their funiture plant. Thus, the following statements are very likely true;

I. This loan is secured by the value of the plant as a collateral incase the company defaults in the timely repayment of the loan.

II. This loan is secured by other business assets as a collateral incase the company defaults in the timely repayment of the loan.

III. The loan is made based on forecasted future returns from the investment. This is the basis on which debts such as loans are serviced.