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If the Initial Current Ratio for a fiRm Is Greater

question 98

True/False

If the initial current ratio for a firm is greater than one, then using cash to purchase marketable
securities will decrease net working capital.


Definitions:

Cost Behavior

The way in which costs change in relation to changes in a business' levels of activity or production volume.

Related Activity

Activities or actions that are associated with or pertinent to a main activity or topic.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Cost

A sacrifice made to obtain some benefit.

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