A Company with Working Capital of $600,000 and a Current

question 12

Multiple Choice

A company with working capital of $600,000 and a current ratio of 3.25 pays a $200,000 short-term liability.The amount of working capital immediately after payment is:

• A) $400,000.
• B) $800,000.
• C) $600,000.
• D) $200,000.

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Definitions:

Good Quality

The degree to which a product or service meets or exceeds customer expectations.

Moral Hazard

A situation where one party engages in risky behavior knowing that it is protected against the consequences, often due to asymmetric information.

Recklessly

Acting with a lack of concern for the risk or negative consequences of one's actions.

Airbags

Safety devices in vehicles designed to inflate rapidly in the event of a collision to prevent or reduce injury to passengers by limiting direct impact.