What effect would the following actions have on a firms current ratio? Assume that net working capital

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What effect would the following actions have on a firm’s current ratio? Assume that net working capital is positive.

a. Inventory is purchased for cash.

b. A supplier is paid.

c. A bank loan is repaid.

d. A long-term debt matures and is paid.

e. A customer pays off an account.

f. Inventory is sold.

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Essentials of Corporate Finance

ISBN: 978-1260013955

10th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Question Posted: Jun 17, 2015 03:26 AM

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What effect would the following actions have on a firms current ratio? Assume that net working capital

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a No change Both inventory and cash are current assets b Increase Both curren...View the full answer

Essentials of Corporate Finance

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