If the Current Account Is a Deficit of 25 Then

question 31

Multiple Choice

If the current account is a deficit of 25 then

• A)the capital account is a surplus of 25.
• B)the cash account is a surplus of 25.
• C)the capital account is a surplus of 25 if the cash account is zero.
• D) the cash account is a deficit of 25.

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Definitions:

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its interest obligations with its cash flow.

Depreciation Expense

Segmenting the financial outlay of a physical asset across its period of service.

EBIT

A financial performance indicator, earnings before interest and taxes, which omits the costs related to interest and income taxes.

Times Interest Earned

A financial metric that compares a company's income before interest and taxes to its interest expenses, indicating ability to meet interest obligations.