If a Firm's Current Ratio Exceeds 1

question 79

Multiple Choice

If a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable?

• A) Net working capital increases.
• B) Net working capital decreases.
• C) Current ratio increases.
• D)Current ratio decreases.

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Definitions:

Motorcycle Clubs

Social organizations of individuals who are enthusiasts of motorcycle riding, often characterized by shared values, rituals, and allegiance to the club's culture.

Collective Behaviour

Actions and behaviors of a group of people who come together and act in a shared way, often spontaneously and without a clear division of roles.

Exponential Growth

A growth rate that becomes ever more rapid in proportion to the growing total number or size.

Innovation

The process of creating new ideas, products, or methods, which improve upon existing standards or introduce novel solutions.