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A Firm Has a Current Ratio Greater Than 1 A) Option a
B) Option B
C) Option C
D)

question 2

Multiple Choice

A firm has a current ratio greater than 1.0. During the course of the year the firm sells $60M of accounts receivable with limited recourse. If it had not sold the receivables it would have to have taken out a short-term loan. The effect of selling the receivables is:  Accounts Receivable Turnover  Current Ratio  A)   higher  lower  B)   higher  higher  C)   lower  lower  D)   lower  higher \begin{array} { | l | c | c | } \hline & \text { Accounts Receivable Turnover } & \text { Current Ratio } \\\hline \text { A) } & \text { higher } & \text { lower } \\\hline \text { B) } & \text { higher } & \text { higher } \\\hline \text { C) } & \text { lower } & \text { lower } \\\hline \text { D) } & \text { lower } & \text { higher } \\\hline\end{array}


Definitions:

Plate Boundary

The edges where two or more of Earth's tectonic plates meet, characterized by seismic activity, volcanic eruptions, and the formation of geological features.

Oldest Oceanic Crust

The most ancient sections of Earth's oceanic crust, markedly older than most other ocean floor areas, typically found in the deep ocean basins.

Plate Boundary

The edges where two or more of Earth's tectonic plates meet, which are zones of seismic and volcanic activity.

Seafloor Spreading

The formation of fresh oceanic crust at mid-ocean ridges, which gradually drifts away from the ridge, aiding in the movement of continents.

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