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Consider this statement: In evaluating a firm's liquidity, this is important to anticipar the expected timing of future cash inflows from selling goods and collecting
Consider this statement: "In evaluating a firm's liquidity, this is important to anticipar the expected timing of future cash inflows from selling goods and collecting cash from customers, versus those cash outflows from paying the suppliers". Which one of below best fits what the statement above is referring to? Select one: A. Cash ratio B. Working capital C. Net trade cycle D. Current ratio ACY FIVE Limited ("ACY FIVE") issued a 5-year note payable of $100,000 with an annual interest rate of 5% in the prior year. In the current year, ACY FIVE plans to acquire an office equipment costing $50,000 with an estimated useful life of 5 years. The company would fully settle the purchase price with its surplus cash on hand. Question If this equipment is acquired during the current year, how would this affect its "times interest earned" this year? Select one: A. No impact on "times interest earned". This is because the purchase price would be fully paid. B. "Times interest earned" shall decrease. This is because depreciation expense reduces the profit. C. "Times interest earned" shall increase. This is because depreciation expense reduces the profit D.No impact on "times interest earned". This is because depreciation expense is a non-cash expense
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