The King Carpet Company has $3,110,000 in cash and a total of $11,430,000 in current assets. The
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The King Carpet Company has $3,110,000 in cash and a total of $11,430,000 in current assets. The firm's current liabilities equal $5,550,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings down to $1,040,000 by paying $579,000 in cash to expand the firm's truck fleet and using
$1,491,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
Related Book For
Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin
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