Indicate Whether Each of the Actions Listed Below Will Immediately

question 48

Essay

Indicate whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is greater than 1.0 before the action is taken.
- $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Current ratio\quad\quad Acid-test ratio\quad\quad Total debt-to-equity ratio }$
$\text { Cash sale of land for a gain }$

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Definitions:

Expected Rate of Return

The anticipated return on an investment over a specific period, taking into account both the risk of the investment and historical performance trends.

Operating Income

This refers to the profit a company generates from its normal business operations, excluding any income from investments or non-recurring expenses.

Other Postretirement Benefit Expense

Expenses associated with retirement benefits other than pensions, such as healthcare benefits, recognized during the period employees receive the benefits.

Service Cost

In accounting, refers to the expense recognized for employees' future retirement benefits earned during the current period.