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solve Which of the following section would decrease the current ratio(assuming an initial current ratio of 0.8, and current liabilities equal to $1,000,000)? borrow $1,00,000
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Which of the following section would decrease the current ratio(assuming an initial current ratio of 0.8, and current liabilities equal to $1,000,000)? borrow $1,00,000 in sheet term debt and deposit this money (i.e., $100,000) into the firm's cash account Borrow $200,000 in long-term debt to $200,000 worth of additional inventory. Borrow $50,000 of short-term debt and use the proceeds to pay all operating expenses, thus lowering [i.e. accrued expenses) by $50,000. Sell $250,000 of fixed assets to pay off an equal amount of long-term debt. None of the above-that is, none of the actions listed about will decrease the current ratio. RedCap Manufacturing Inc. is planning to borrow money by taking cost a short term load(i.e., increase notes payable) and depositing this money directly into the firm's checking account(i.e., increase cash) RedCap believes that this event will have no affect on either sales or costs, and therefore no affect on net income. All else constant, this new policy should cause the firm's quick ratio(assuming an initial quick ratio of 1.5) to: Increase Decrease No Change Not enough information is provided to answer this question. BlueHat, Inc. is planning to use excess cash that the company has in its checking account(i.e, reduce cash) to pay off a long term loan balance (i.e., decrease long-term debt) BlueHat believes that this event will have no affect on either sales or costs, and therefore no affect on net income. All else constant, this new policy should cause the firm's debt ratio (assuming an initial debt ratio of 45%) to: Increase Decrease No Change Not enough information is provided to answer this question GreenChapeau, Inc, is planning to increasing its short-term loans(i.e., notes payable) to pay for an increase in the firm's basic inventory level(i.e., increase inventory. GreenChapeau believes that this event will have no affect on either sales or costs, and therefore no affect on net income. All else constant, this new policy should cause the firm's current ratio of 1.5) to: Increase Decrease No Change Not enough information is provided to answer thisStep by Step Solution
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