A Company Has Current Assets of $100,000, Total Assets of $250,000

question 64

Multiple Choice

A company has current assets of $100,000, total assets of $250,000, current liabilities of $20,000, and long-term liabilities of $50,000. How much of its existing cash can the company use to acquire equipment without allowing its current ratio to decline below 2.0 to 1?

• A)$ 40,000
• B)$150,000
• C)$180,000
• D)$ 60,000

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Definitions:

Dividends Increased

A situation in which a company raises the amount of money paid to shareholders as dividends, often indicating the company's solid financial health.

Annual Dividend

The total dividend payments a company makes to its shareholders in a year.

Required Rate of Return

The required rate of return is the minimum return an investor expects to receive on an investment, considering its risk level.

Dividend Increase

An action by a company to increase the amount of dividends distributed to its shareholders.