Question: PROBLEM 2 a. Modern Medical Devices has a current ratio of 0.5. Which of the following actions would improve (i.e., increase) this ratio? 0.5 1.2
| PROBLEM 2 | |||||||||
| a. Modern Medical Devices has a current ratio of 0.5. Which of the following actions would improve | |||||||||
| (i.e., increase) this ratio? | 0.5 | 1.2 | |||||||
| - Use cash to pay off current liabilities. | |||||||||
| - Collect some of the current accounts receivable. | |||||||||
| - Use cash to pay off some long-term debt. | |||||||||
| - Purchase additional inventory on credit (i.e., accounts payable). | |||||||||
| - Sell some of the existing inventory at cost. | |||||||||
| b. Assume that the company has a current ratio of 1.2. Now, which of the above actions would improve | |||||||||
| this ratio? | |||||||||
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