A Firm Has a Current Ratio of 1

question 41

Multiple Choice

A firm has a current ratio of 1.4 and a quick ratio of .9.Given this, you know for certain that the firm:

• A)pays cash for its inventory.
• B)has more than half its current assets invested in inventory.
• C)has more cash than inventory.
• D)has more current liabilities than it does current assets.
• E)has positive net working capital.

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Definitions:

Complete

In a market context, it refers to a situation where there is sufficient information and resources for transactions to occur without any barriers.

Indifference Curves

Graphical representations showing different combinations of goods that provide the same level of satisfaction or utility to a consumer.

Midterm Exams

Midterm exams are tests given roughly halfway through an academic term to assess students' understanding and mastery of the course material up to that point.

Indifference Curves

A graph showing combination of two goods that provide equal satisfaction and utility to an individual.