Which of the following actions would decrease a companys quick ratio?

Select one:

a.

Dispose equipment and use the proceeds to pay down short-term borrowings.

b.

Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year.

c.

Issue new stock and use the proceeds to purchase additional plant and equipment.

d.

Reduce the companys days sales outstanding to the industry average and use the resulting cash savings to repay the suppliers.

Firm Q recently reported $320,000 of sales, $205,500 of operating costs other than depreciation, and $30,000 of depreciation. The company had $50,000 of outstanding bonds that carry a 7% interest rate, and its income tax rate was 25%. How much was the firm's net income? The firm uses the same depreciation expense for tax and stockholder reporting purposes.

Select one:

a.

$60,750

b.

$81,000

c.

$25,875

d.

$84,500