Refer to the Following Selected Financial Information from McCormik, LLC

question 8

Multiple Choice

Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2. $$\begin{array} { | l | r | r | } \hline & \text { Year 2 } & { \text { Year 1 } } \\\hline \text { Cash } & \$ 37,500 & 36,850 \\\hline \text { Short-term investments } & 90,000 & 90,000 \\\hline \text { Accounts receivable, net } & 85,500 & 86,250 \\\hline \text { Merchandise inventory } & 121,000 & 117,000 \\\hline \text { Prepaid expenses } & 12,100 & 13,500 \\\hline \text { Plant assets } & 388,000 & 392,000 \\\text { Accounts payable } & 113,400 & 111.750 \\\hline \text { Net sales } & 711,000 & 706,00 \\\hline \text { Cost of goods sold } & 390,000 & 385,500 \\\hline\end{array}$$

• A) 2.26.
• B) 1.98.
• C) 2.95.
• D) 3.05.
• E) 1.88.

Grasp the concept of the marginal rate of transformation and its relevance to efficient economies.

Understand the relationship between production processes and market demands to maximize profit.

Analyze scenarios of resource allocation and its impact on social welfare.

Apply economic concepts to analyze resource allocation decisions.

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Definitions:

Kingpin

A critical component in the steering mechanism of a vehicle, particularly in trucks, that allows the front axle to pivot.

Tapered

Describes an object or structure that gradually decreases in thickness or width towards one end.

Tie Rod

A crucial part of the steering mechanism that transmits force from the steering center link or rack gear to the steering knuckle, causing the wheels to turn.

Toe Setting

An alignment parameter that refers to the angle of the wheels in relation to the vehicle's longitudinal axis, affecting handling and tire wear.