If a Company Has Current Assets of $15,000 and Current

question 72

True/False

If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio is 1.6

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Definitions:

Warranty

A guarantee provided by a seller that a product will meet certain performance standards or an offer to repair or replace defective goods within a certain time frame.

Implicit Rate Of Return

An interest rate that equates the present value of expected future cash flows of an investment to its initial cost.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term the funds necessary to purchase an asset.

Capital Lease

A lease agreement that grants a lessee control over an asset for a substantial portion of its useful life, and is recorded as an asset and liability on the balance sheet.