Which of the Following Statements Is Correct

question 76

Multiple Choice

Which of the following statements is correct?

• A)The cash ratio measures a firm's ability to pay long-term debt with its available cash and marketable securities.
• B)Holding extremely high levels of liquidity to guard against liquidity crises is an inappropriate goal for the firm.
• C)The quick (or acid-test) ratio measures a firm's ability to pay off short-term obligations with long-term debt.
• D)The current ratio is a more stringent measure of liquidity than the quick (or acid-test) ratio.

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Definitions:

Lipid Solubility

The ability of a substance to dissolve in fats, oils, and lipids, affecting its absorption and distribution in the body.

Medication Absorption

The process by which drugs pass from the site of administration into the bloodstream.

Water Solubility

The ability of a substance to dissolve in water, forming a homogeneous solution.

Metric System

A decimal system of measurement based on meters, liters, and grams as units of length, volume, and weight respectively.