Considered Alone, Which of the Following Would Increase a Company's

question 50

Multiple Choice

Considered alone, which of the following would increase a company's current ratio?

• A) An increase in accounts payable.
• B) An increase in net fixed assets.
• C) An increase in accrued liabilities.
• D) An increase in notes payable.
• E) An increase in accounts receivable.

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Definitions:

Crossover Point

The point at which two or more different financial indicators meet, often used in budgeting to identify when an investment will start to generate profit.

Mutually Exclusive Projects

Projects where the acceptance of one will automatically exclude the option of accepting the other.

IRR Rule

A guideline for evaluating potential investments wherein an investment is considered acceptable if its internal rate of return exceeds a predefined threshold.

NPV Rule

A principle stating that an investment should be made if its Net Present Value (NPV) is positive, indicating that the project's returns exceed its costs.