Table 152 the Company Earns 5 Percent on Current Assets

question 272

Multiple Choice

Table 15.2 The company earns 5 percent on current assets and 15 percent on fixed assets. The firm's current liabilities cost 7 percent to maintain and the average annual cost of long-term funds is 20 percent.
-The firm would like to increase its current ratio. This goal would be accomplished most profitably by ________. (See Table 15.2)

• A) increasing accounts payable
• B) decreasing inventory
• C) increasing accounts receivable
• D) decreasing cash and cash equivalents

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Definitions:

Inductive Reasoning

A method of reasoning in which specific observations or measurements are used to make general conclusions or theories.

Formal Reasoning

The process of thinking logically and methodically about abstract concepts, often using systems of rules.

Informal Reasoning

The process of thinking about something in a non-structured or non-formal way, often based on personal judgment or experience.

Algorithm

A set of rules or a step-by-step process designed to perform a specific task or solve a problem.