A Company with Working Capital of $500,000 and a Current

question 127

Multiple Choice

A company with working capital of $500,000 and a current ratio of 2.5 pays a $85,000 short-term liability. The amount of working capital immediately after payment is

• A) $585,000
• B) $415,000
• C) $500,000
• D) $85,000

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Definitions:

Net Investment Income

The income received from investment assets (like stocks and bonds) after expenses associated with making the investment are deducted.

Stocks

Securities that represent ownership in a corporation, entitling the holder to a portion of the company's profits in the form of dividends.

Deductible Charitable Contributions

Deductible charitable contributions are donations made to qualified organizations that can be subtracted from your gross income to lower your taxable income.

Political Party

An organized group of people with at least roughly similar political aims and opinions, that seeks to influence public policy by getting its candidates elected.