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Please help me anser these Short Term Solvency Questions! Thanks for your expertise!!! 3. Short-term solvency, or liquidity, ratios Aa Aa Halen Inc. has a
Please help me anser these Short Term Solvency Questions! Thanks for your expertise!!!
3. Short-term solvency, or liquidity, ratios Aa Aa Halen Inc. has a current ratio of 2.20 times on current liabilities of $800,000. If Halen has $300,000 worth of inventories, what is the firm's quick ratio? O 1.83 times O 2.03 times O 1.53 times O 2.23 times O 1.63 times Halen is considering an expansion that would require a rapid increase in its inventories. The firm will issue short-term debt (notes payable) and use those funds to buy new inventories. Halen's bond contracts stipulate that it must maintain a quick ratio of at least 1.30 times, or else it is in default. How much new inventory can Halen raise before it violates its bond contracts? O $323,077 O $660,000 O $300,000 O $550,000 $454,545 If Halen follows through with this expansion plan, what will its new current ratio be? O 1.79 times O 1.44 times O 1.85 times O 1.90 times O 1.66 times Which current asset is generally considered to be the least liquid? O Inventories Accounts receivable O Cash Most firms borrow money to finance some of their assets, and most will choose to borrow some long-term funds and some short-term funds. Which group of lenders is more likely to care about a firm's liquidity ratios, short-term or long-term lenders? O Short-term lenders O Long-term lendersStep by Step Solution
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