Explain the advantages and disadvantages of the sources of cash as the primary source of repayment on a loan.

Importance of identifying the primary source of repayment

Explain the importance of identifying the “primary” source of repayment. Clearly, the primary source of repayment is always “cash.” The analysis question is really one of identifying the source of the cash used to repay the loan.

Explain the advantages and disadvantages of the sources of cash as the primary source of repayment on a loan