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If a Firm Has a Current Ratio of 2

question 176

Multiple Choice

If a firm has a current ratio of 2.5, it means that for every $2.50 in ______ it has $1.00 in ______.


Definitions:

Target Costs

The desired cost of a product for which a company aims in order to achieve a desired profit margin after considering the selling price and required profit.

Markup Percentage

The percentage added to the cost price of goods to cover overhead and profit.

Product Cost

Refers to the total cost incurred to produce goods or services, including raw materials, labor, and overhead expenses.

Selling and Administrative Costs

Expenses related to the sales process and overall management of a company, excluding production costs.

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