Question
Country Manufacturing, Inc. just purchased a new 3D printer. This machine will allow the company to produce its product in half the time that it
Country Manufacturing, Inc. just purchased a new 3D printer. This machine will allow the company to produce its product in half the time that it took before. The main benefit of the new machine is that it will allow Country Manufacturing, Inc. to cut its average inventory level in half (and thereby significantly decrease the average level of inventory). Otherwise, the new manufacturing system is expected to have NO effect on costs, NO effect on sales and thus, NO impact on net income.
If any asset change(s) resulting from this new policy will be offset by a corresponding and equal change in short-term debt (i.e., notes payable), all else constant, this new policy should cause the firm'squick ratio(prior to this change, Country's quick ratio was equal to 0.72) to:
Increase
Decrease
No change
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started