A Company Has Current Assets of $80,000, Long-Term Assets of $150,000

question 146

Multiple Choice

A company has current assets of $80,000, long-term assets of $150,000, current liabilities of $60,000, and long-term liabilities of $40,000. The current ratio is:

• A) .80.
• B) 1.33.
• C) 2.00.
• D) 2.33.

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Definitions:

Borrow

To receive something of value with the promise to return it or its equivalent to the lender at a later date.

Bond Issue

The process by which a borrower issues bonds to lenders or investors to raise capital under specified terms.

Coupon

Coupon refers to the interest payment associated with a bond or fixed-income security, typically expressed as a percentage of the bond's face value and paid at regular intervals.

Interest Tax Shield

The decrease in income tax liability due to the ability to deduct interest payments.