Figure 8-6 -Refer to Figure 8-6.Which of the Following Statements Is Correct

question 137

Multiple Choice

Figure 8-6

-Refer to Figure 8-6.Which of the following statements is correct?

• A)Total surplus before the tax was imposed amounted to $250.
• B)After the tax is imposed, consumer surplus amounts to 36 percent of its pre-tax value.
• C)After the tax is imposed, producer surplus amounts to 36 percent of its pre-tax value.
• D)All of the above are correct.

---

Definitions:

Current Ratio

This ratio indicates how well a business can settle its short-term debts with assets that are readily available.

Acid-test Ratio

A stringent indicator of a company’s short-term liquidity, calculated by dividing liquid assets by current liabilities, excluding inventory.

Debt-to-equity Ratio

The ratio that indicates the mix between shareholders' equity and debt in the capital structure used to finance assets.

Receivable Turnover

A financial metric that measures how efficiently a company collects on its accounts receivable, calculated as sales divided by accounts receivable.