A Company Has Current Assets of $100,000,total Assets of $250,000,current

question 156

Multiple Choice

A company has current assets of $100,000,total assets of $250,000,current liabilities of $20,000,and long-term liabilities of $50,000.How much of its existing cash can the company use to acquire equipment without allowing its current ratio to decline below 2.0 to 1?

• A) $40,000
• B) $60,000
• C) $150,000
• D) $180,000

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Definitions:

Promisor

An individual or entity that makes a promise or agreement to perform a specified action in a contract.

Contractual Rights

The specific entitlements and obligations that are established within a contract, allowing the parties involved to enforce the terms legally.

Obligor

A party who is legally bound to fulfill an obligation or debt to another party, known as the obligee.

Personal Service

Personal service refers to tasks or assistance provided directly to an individual, often implying customization and direct interaction.