Redfern Company Has Current Assets of $150,000 and Current Liabilities

question 58

Multiple Choice

Redfern Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?

• A)$10,000
• B)$20,000
• C)$30,000
• D)$40,000

---

Definitions:

Optimal Level

The most efficient, effective, or desirable point or degree of an activity or function, balancing costs and benefits.

Profit-Maximizing

A process or strategy aimed at achieving the highest possible profit within a given business context.

Monopolistic Competition

A market structure characterized by many firms selling differentiated products, with few barriers to entry and some degree of market power.

Economic Profit

The differential between total receipts and overall disbursements, accounting for both direct and indirect expenditures.