Using the Following Balance Sheet Information, Find the Firm's Acid-Test

question 135

Multiple Choice

Using the following balance sheet information, find the firm's acid-test ratio. Cash and marketable securities $20 million
Accounts receivable $10 million
Inventory $30 million
Current liabilities $30 million

• A) 0.60
• B) 1.00
• C) 1.40
• D) 2.00

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Definitions:

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved in a market.

Sales Tax

A tax imposed by a government on sales of goods and services, typically calculated as a percentage of the sale price.

Deadweight Loss

An economic inefficiency that occurs when a market does not reach equilibrium, leading to a loss of total social welfare.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.