Which Company Has a Higher Reliance on Debt to Support

question 50

Multiple Choice

Which company has a higher reliance on debt to support operations: Widget,with a debt ratio of 2; Mouse Trap,with a current ratio of 1.7; Gadget,with a current ratio of 1.6; or Better Trap,with a current ratio of 1.5?

• A)Widget
• B)Mouse Trap
• C)Gadget
• D)Better Trap

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Definitions:

Universal Life

A type of flexible permanent life insurance that offers the low-cost protection of term life insurance as well as a savings element, which is invested to provide a cash value buildup.

Policyholder's Perspective

Insights or considerations from the viewpoint of an individual or entity that owns an insurance policy.

Fiduciary Responsibility

A legal obligation requiring an individual or organization to act in the best interest of another party, typically in financial matters.

Prudent Investor Rule

Prudent Investor Rule is a legal guideline for fiduciaries that mandates investment strategies should be made as a prudent investor would, considering risk, return, diversification, and the objectives of the trust or beneficiary.