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

Interpret supply curves in the context of pure competition.

Assess the role of marginal cost and marginal revenue in optimizing production levels.

Examine the factors influencing firm's short-run supply decisions.

Understand the equilibrium concept in a competitive market.

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Definitions:

Shortage Cost

Costs incurred when demand exceeds supply, leading to inventory shortfalls, lost sales, and potential damage to customer satisfaction.

Negative Cumulative Cash Surplus

A financial situation where the cumulative cash flows from a project or business are negative, indicating a deficit.

Borrowing Need

The necessity for an individual or organization to raise funds through loans or debt issuance to finance its operations or investments.

Costs Of Placing An Order

Expenses associated with ordering inventory, including administrative costs, shipping, handling, and procurement costs, critical in managing inventory levels.