A Firm Wants to Strengthen Its Financial Position

question 85

Multiple Choice

A firm wants to strengthen its financial position.Which of the following actions would increase its current ratio?

• A) Reduce the company's days' sales outstanding to the industry average and use the resulting cash savings to purchase a new plant and equipment.
• B) Use cash to repurchase some of the company's own stock.
• C) Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year.
• D) Issue new stock,then use some of the proceeds to purchase additional inventory and hold the remainder as cash.
• E) Use cash to increase inventory holdings.

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Definitions:

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The official power to make legal decisions and judgments, often defined geographically or by area of responsibility.

War Crimes

Serious breaches of international law during an armed conflict which include mistreatment of prisoners, genocide, and targeting civilians.

Geneva Conventions

A series of international treaties and protocols that establish standards of humane treatment for victims of war, including wounded or sick soldiers, civilians, and prisoners of war.

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