The "Current Ratio" of a Company Is the Ratio of Its

question 56

Multiple Choice

The "current ratio" of a company is the ratio of its current assets to its current liabilities.Suppose a company has current assets of $250,000 and current liabilities of $100,000.If the company wants to make a short-term loan and have their current ratio no less than 2.2,what is the maximum amount it can borrow? (Note: The funds they receive are considered as current assets and the loan as a current liability.)

• A) $15,000
• B) $20,000
• C) $25,000
• D) $30,000
• E) $33,000

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