● The maximum permissible bank borrowings as per the third method can be ascertained as follows:

Amount (`)

Total CA required by the borrower 100,000 Less: Core Current Assets (assumed) 8,000 Balance 92,000 25% to be provided by borrower through long-term funds (92000 ¥ 25%) 23,000 Balance 69,000 Less:

Current Liabilities (excluding bank borrowing)

Maximum permissible bank borrowing 20,000 49,000

(This method was not accepted for implementation and hence is of only academic interest).