A Company Has Current Assets of $100,000, Total Assets of $250,000

question 81

Multiple Choice

A company has current assets of $100,000, total assets of $250,000, current liabilities of $20,000, and long-term liabilities of $50,000. How much of its existing cash can the company use to acquire equipment without allowing its current ratio to decline below 2 to 1?

• A)$ 40,000
• B)$150,000
• C)$180,000
• D)$ 60,000