A Firm Has $600,000 in Current Assets and $150,000 in Current

question 116

Multiple Choice

A firm has $600,000 in current assets and $150,000 in current liabilities.Which of the following is correct if they use cash to pay off $50,000 in accounts payable?

• A)Current ratio will increase to 5.0.
• B)Net working capital will increase to $500,000
• C)Current ratio will decrease
• D)Net working capital will not change

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Definitions:

Mental Imagery

Mental imagery involves the representation and simulation of sensory experiences in the mind, without external input, often used for creativity, problem-solving, or rehearsal.

Potential Obstacles

Foreseeable challenges or barriers that may impede progress or success.

Mental Imagery

The ability of individuals to simulate or recreate visual perceptions and experiences in their minds without the input of external stimuli.

Job Enrichment

The process of making a job more rewarding, challenging, and motivating through adding more meaningful tasks and duties.