Assume that current assets $=$$$300,000$ and that current liabilities $=$$$100,000.Ifan$ account payable $of$ $$50,000$ were paid off, what would $be$ the impact $on$ the

firm's working capital and current ratio?

Working capital would decrease from $$200,000to$ $$150,000,$ and the current ratio would decrease from $3\mathrm{.}0to2\mathrm{.}5.$

Working capital would decrease from $$200,000to$ $$150,000,$ and the current ratio would increase from $3\mathrm{.}0to5\mathrm{.}0.$

Working capital would remain $$200,000,$ but the current ratio would increase from $3\mathrm{.}0to5\mathrm{.}0.$

Working capital would remain $$300,000,$ but the current ratio would increase from $3\mathrm{.}0to5\mathrm{.}0.$