Flum Packages, Inc. Assets Current assets Fixed assets Liabilities & Equity $10,000 Current Liabilities $ 5,000 20,000 Long-term debt 12,000 Equity 13,000 Total $30,000
Flum Packages, Inc. Assets Current assets Fixed assets Liabilities & Equity $10,000 Current Liabilities $ 5,000 20,000 Long-term debt 12,000 Equity 13,000 Total $30,000 Total $30,000 The company earns 5 percent on current assets and 15 percent on fixed assets. The firm's current liabilities cost 7 percent to maintain and the average annual cost of long-term funds is 20 percent. The firm would like to increase its current ratio. This goal would be accomplished most profitably by (See Table 15.2) Select one: O A. increasing accounts payable B. increasing accounts receivable O C. decreasing inventory O D. decreasing cash and cash equivalents Clear my choice
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