Question
The King Carpet Company has $3,040,000 in cash and a total of $12,230,000 in current assets. The firm's current liabilities equal $5,080,000 such that the
The King Carpet Company has
$3,040,000
in cash and a total of
$12,230,000
in current assets. The firm's current liabilities equal
$5,080,000
such that the firm's current ratio equals
2.4.
The company's managers want to reduce the firm's cash holdings down to
$1,070,000
by paying
$503,000
in cash to expand the firm's truck fleet and using
$1,467,000
in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
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The Complete Personal Finance Handbook
Authors: Teri B Clark
1st Edition
160138047X, 978-1601380470
