Funds derived from term loans are used for a number of purposes. One of the most important is the purchase of buildings and equi

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问题     Funds derived from term loans are used for a number of purposes. One of the most important is the purchase of buildings and equipment needed by the borrower to maintain a competitive position and keep pace with the demand for the firm’ s products. In addition, increased sales usually call for increased working capital, which may be financed through term borrowing. Term loans are used to finance new ventures, at which a firm adds a new product or integrates vertically to produce some portion of the raw materials needed in its operations. Term borrowing is also used to refinance existing obligations.
    Frequently, the borrower needs to draw down the funds over a period of many months, as in the case of a major plant expansion or the acquisition of a fleet of aircraft. In such cases it is common practice to combine the term loan agreement with a commitment agreement or revolving credit. The lender agrees to make funds available to the borrower as they are needed over a period of, say, two years up to a specified total amount. The agreement also provides that at the end of the commitment period the entire amount borrowed to that date shall be incorporated in a term loan. For an arrangement of this kind, the borrower is normally required to pay a commitment fee of from one-fourth to one-half of 1 percent on unborrowed amounts during the period of the bank’ s commitment.
The borrower may draw the funds from the credit aggregates within the time limit for expanding their operations.

选项 A、Right
B、Wrong
C、Doesn’t say

答案A

解析 整个第一段和第二段第一句都说明了在确定的时期内,定期贷款可能被用作扩大经营,a major plant expansion(企业扩大)所带来的提示。
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