A Company Has a Current Ratio of 2

question 142

Multiple Choice

A company has a current ratio of 2.0 and a quick ratio of 1.5.Assume the company then paid previously declared dividends in the amount of $20,000.Which of the following statements is true?

• A)The current ratio will decrease and the quick ratio will decrease.
• B)The current ratio will decrease and the quick ratio will not change.
• C)The current ratio and the quick ratio will not change.
• D)The current ratio will increase and the quick ratio will increase.

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Definitions:

Value-Based Approach

A strategy focusing on providing and maximizing value to customers or stakeholders, often in terms of quality, service, and experience.

Research and Development (R&D)

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Production Function

An economic model depicting the relationship between input combinations and the maximum output that can be produced with those inputs.

Differentiating

The process of distinguishing a product or service from others to make it more attractive to a particular target market.