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Module: General Practice

Q158: What is the purpose of a "Techno-Economic Viability" (TEV) study in the context of MSME rehabilitation?

A
To determine if the machinery used by the MSME is imported or indigenous.
B
To assess whether the business can generate sufficient cash flow to service the debt after restructuring.
C
To calculate the scrap value of the company's assets for immediate sale.
D
To verify the KYC documents of the promoters.
✅ Correct Answer: B
🎯 Quick Answer:
To assess cash flow and viability.
Concept Definition: A TEV Study is a detailed appraisal report usually conducted by independent experts.
Components: Technical Viability: Is the technology used obsolete?
Is the production process efficient?
Economic Viability: Are the projections for sales, costs, and margins realistic?
Will the resulting cash flow be enough to repay the loan over the proposed longer tenure?
Causal Reasoning: Banks cannot restructure a "zombie" firm.
Restructuring is only permitted if the unit is viable.
The TEV study provides the evidentiary basis for this decision.
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