FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mercury Corp. has a current ratio of 0.7 and Venus, Inc. has a current ratio of 2.5. Both companies decide to double their current liabilities

Mercury Corp. has a current ratio of 0.7 and Venus, Inc. has a current ratio of 2.5. Both companies decide to double their current liabilities by adding short term debt and putting the funds obtained in the cash account. How does this action change the current ratios?

A. Both ratios remain the same

B. Mercurys changes to 1.4 and Venus changes to 5.0

C. Mercurys changes to 0.35 and Venus changes to 5.0

D. Mercurys changes to 0.85 and Venus changes to 1.75

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Finance Transactions Policy And Regulation

International Finance Transactions Policy And Regulation

Authors: Hal Scott, Anna Gelpern

23rd Edition

1647084105, 978-1647084103

More Books

Students also viewed these Finance questions

Question

★★★★★
A firm has earnings before interest and tax of $1,000,000, interest of $200,000, and net income of $400,000 in Year 1. Required a. Calculate the degree of financial leverage in base Year 1. b. If...

Answered: 1 week ago

Question

★★★★★
Cash Accounts Receivable $13,600 40,800 Supplies 10,000 Accounts Payable 21,000 All account balances are normal. Throughout the month of May 2020, Meghan Medical Services had the following...

Answered: 1 week ago

Question

★★★★★
Electric bulbs manufactured in a production unit are packaged in boxes, with each box containing 120 bulbs. The probability that a box has i defective bulbs is 15, for each i = 0, 1, 2,, 4. If we...

Answered: 1 week ago

Question

★★★★★
On August 20, Mr. and Mrs. Cleaver decided to buy a property from Mr. and Mrs. Ward for $105,000. On August 30, Mr. and Mrs. Cleaver obtained a loan commitment from OKAY National Bank for an $84,000...

Answered: 1 week ago

Question

★★★★★
White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Milling Department, the materials pass...

Answered: 1 week ago

Question

★★★★★
A surveyor is attempting to measure the distance across a river at points A and B on opposing sides of the river. She marks points A and C on one side of the river and notes that the distance between...

Answered: 1 week ago

Question

★★★★★
Amelie is setting up in business importing French cheeses. She could open up a small shop, a large outlet, or no shop at all if she decides to sell online only (which she won't be able to do for...

Answered: 1 week ago

Question

★★★★★
Describe the wicked problem in detail - when did it become an issue for the organization; which aspects of the problem are you most concerned about; who is affected; etc. Your Initial thought about...

Answered: 1 week ago

Question

★★★★★
This is a "critical thinking" Partnership project. Perform some Internet research and read about the Diffusion of Innovation (Rogers, 1962) and the 5 types of Human Adopter Groups that must be...

Answered: 1 week ago

Question

★★★★★
Based on the WCDM screen, how can we compare Italy and Japan in terms of overall default risk on their debt? Japan has over 3x the total debt of Italy, and a worse credit rating, so its credit...

Answered: 1 week ago

Question

★★★★★
Briefly explain Feeding America (an organization) Operational Model Based on the various operational models (e.g., entrepreneurial support model, market intermediary model, market linkage model,...

Answered: 1 week ago

Question

★★★★★
What are the forces for change, that is, what forces could lead to your ideal situation?

Answered: 1 week ago

Question

★★★★★
Looking at your figure, which side has the stronger forces? What does this suggest about the likelihood of change in this situation?

Answered: 1 week ago

Question

★★★★★
Describe how managing in a global environment can differ from the traditional approach to managing. Describe one way that we can develop managers to be more successful in a global environment.

Answered: 1 week ago

Previous Question Next Question