A Company Has Current Assets of $450,000 and a Current

question 81

Multiple Choice

A company has current assets of $450,000 and a current ratio is 2.5. Assume that the company prepays rent for 9 months in the amount of $20,000. What is the amount of the current ratio after t his transaction?

• A) 2.39
• B) 2.61
• C) 2.5
• D) 2.81

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Definitions:

Private Placement

The sale of securities to a relatively small number of select investors as a way of raising capital.

Sophisticated Investor

An investor with significant experience, assets, and knowledge, capable of making well-informed financial decisions and understanding risks.

Accredited Investor

An individual or entity recognized as having the financial sophistication and capacity to bear the risk of investment opportunities that demand less regulatory disclosure.

Securities

Tradable financial assets including stocks, bonds, and options, which represent an investment and a means for entities to raise capital.