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A company has a current ratio of 4.0 and an acid test ratio of 2.0. Because some of its products are not selling, the value

A company has a current ratio of 4.0 and an acid test ratio of 2.0. Because some of its products are not selling, the value of its inventory is reduced. What effect does that revaluation have on these ratios?

Current Ratio Decrease

Decrease

Increase

Acid Ratio Decrease

No effect

No effect

Increase Decrease

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