18-19

Doran Corp. has a current ratio of 6 . Under which of the following scenarios might this indicate a problem? Select one A. inventories are increasing due to the introduction of a new product B. the company is holding cash in expectation of making a large investment in equipment C. receivables are increasing due to increasing sales D. inventories are increasing and the industry in which Doran Corp. operates is experiencing a recession Question 19 Projecting sales price changes depends on factors specific to the firm and its industry that might affect demand and price elasticity. Which of the following types of companies would most likely be able to increase prices? Select one A. A firm in a capital intensive industry that is expected to operate near capacity for the near future. B. A firm in a capital intensive industry in which excess capacity exists. C. A firm operating in an industry that is expected to experience technological improvements in its production process. D. A firm operating in an industry that is transitioning from the high growth to the maturity phase of its life cycle