FOR Q14 ANSWER: B)the level of activity of the business relative to its inventory level

C) the profit before taxes as a percentage of the value of all the assets.

D)the risk of the firm not meeting its interest payments on loans.

Using the following information to finish question 13-14 Account Table 1 -Balance sheet Year 1 Assets Year 2 Current Assets: Cash 50.000 Accounts Receivable 18.000 5.000 Inventories 30,000 150.000 Fixed Assets: 120.000 Building and Equipment 500.000 600.000 Other Investments: Investment in other firms 25.000 25.000 Liabilities Current Liabilities: Accounts payable 20,000 60,000 Long-term debt due this year 20.000 40.000 Long-term liabilities 300,000 320,000 Owner's equity 550.000 600.000 13. Which of the following statements is correct? A) Net Working Capital (NWC) in year 1 is greater than in year 2 B) Net Working Capital (NWC) in year 1 is less than in year 2 C) None of the above 14. The acid test ratio measures A) the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. 51 Page