If Current Assets Exceed Current Liabilities, Payments on Current Liabilities

question 125

Multiple Choice

If current assets exceed current liabilities, payments on current liabilities will:

• A) decrease net working capital.
• B) increase net working capital.
• C) decrease the current ratio.
• D) increase the current ratio.

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Definitions:

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Retirement Income

The total income a person receives after retiring from work, which can come from pensions, savings, investments, and social security benefits.

Compounded Semi-Annually

Interest added to the principal of a deposit or loan every six months, affecting total interest earned or paid.

Periodic Interest Rate

The interest rate applied to a loan or savings account over a specific period of time, often monthly or annually.