A Company with Working Capital of $720,000 and a Current

question 64

Multiple Choice

A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability. The amount of working capital immediately after payment is

• A) $845,000
• B) $595,000
• C) $720,000
• D) $125,000

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Definitions:

Categorization

The process of recognizing, identifying, and understanding by grouping, sorting, or classifying objects, ideas, or experiences based on common attributes.

Perceptual Characteristics

Traits or features that are detected and interpreted by the sensory systems, influencing perception of objects, events, or environments.

Logical Reasoning

The process of using a rational, systematic series of steps based on sound mathematical procedures and given statements to arrive at a conclusion.

Non-literate Cultures

Societies or communities that do not employ a system of writing or rely predominantly on oral transmission for communication and the preservation of knowledge.