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2 years ago

The sum of cash, current investments, and accounts receivable divided by current liabilities equals the?

1 answer:

8 0

The sum of cash, current investments, and accounts receivable divided by current liabilities equals the (C) acid-test ratio.

<h3>What is the acid-test ratio?</h3>

The quick ratio, also known as the acid-test ratio, is a type of liquidity ratio in finance that measures a company's ability to use its near cash or quick assets to immediately extinguish or retire its current liabilities.
It is defined as the proportion of readily available or liquid assets to current liabilities.
Quick assets are current assets that can presumably be converted to cash quickly at close to book value.
A normal liquid ratio is defined as 1:1.
A company with a quick ratio of less than one is currently unable to fully repay its current liabilities.
The acid-test ratio equals the sum of cash, current investments, and accounts receivable divided by current liabilities.

Therefore, the sum of cash, current investments, and accounts receivable divided by current liabilities equals the (C) acid-test ratio.

Know more about acid-test ratio here:

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The correct question is given below:
The sum of cash, current investments, and accounts receivable divided by current liabilities equals the?

(A) current ratio

(B) asset turnover ratio

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In the month of March, Sandhill Salon services 630 clients at an average price of $120. During the month, fixed costs were $26,1

vichka [17]

Answer:

Part 1. total contribution margin in dollars

Total Contribution Margin = $37,800

Part 2. per unit contribution margin

contribution margin per unit of sell = $ 60

Part 3. contribution margin ratio

contribution margin ratio = 50 %

Part 4. break-even point in dollars

break-even point in dollars = $ 52,320

Part 5. break-even point in units

break-even point in units = 436 clients

Explanation:

Part 1. total contribution margin in dollars

contribution margin per unit of sell = Sales Price × 50%

= $120 × 50%

= $ 60

Total Contribution Margin = Number of Clients × Contribution Margin per unit

= 630 × $60

= $37,800

Part 2. per unit contribution margin

contribution margin per unit of sell = Sales Price × 50%

= $120 × 50%

= $ 60

Part 3. contribution margin ratio

contribution margin ratio = Contribution / Sales

= $ 60/ $ 120

= 50 %

Part 4. break-even point in dollars

break-even point in dollars = Fixed Costs / contribution margin ratio

= $26,160 / 0.50

= $ 52,320

Part 5. break-even point in units

break-even point in units = Fixed Costs / contribution per unit

= $26,160 / $60

= 436 clients

6 0

3 years ago

nco purchased a computer for $200,000 and this machine is expected to generate annual cash flows of $48,271 over the next 5 year

Anika [276]

Answer:

The expected rate of return on this investment is:

21%

Explanation:

Cost of computer = $200,000

Annual cash flows for 5 years = $48,271

Total cash flows = $241,355 ($48,271 x 5)

Returns = $41,355 ($241,355 - $200,000)

The expected rate of return = Returns/Costs * 100

or the average of returns and the average of investments (they yield the same results)

Using the total returns and investment:

= $41,355/$200,000 * 100

= 21%

Using the average returns and investment:

= $8,271/$40,000 * 100

= 21%

4 0

3 years ago

The Southern Bell Company manufactures 2,000 telephones per year. The full manufacturing costs per telephone are as follows:

Degger [83]

Answer:

The company should buy the units because it will save $10,000.-

Explanation:

Giving the following information:

Make in-house:

Unitary variable cost= 2 + 8 + 6= $16

Avoidable fixed cost= $8,000

Buy:

Unitary cost= $15

First, we will determine the total cost of each option:

Make in house= 2,000*16 + 8,000= $40,000

Buy= 15*2,000= $30,000

The company should buy the units because it will save $10,000.-

5 0

2 years ago

A.Red Company has excess cash to invest and pays Ş 50.000 to buy Ş 50.0000 face value, % 5 five-year B Company’s bonds July 1, 2

likoan [24]

Answer:

Dr Bond investment $50,000

Cr cash $50,000

Dr cash $1,250

Cr interest revenue $1,250

Dr cash $50,000

cr bond investment $50,000

Explanation:

On July 1 2019,Red company would have parted with cash of $50,000 which means that cash account should be credited with $50,000 while bond investment account is debited with same amount

On receipt of first interest payment of $1,250 (5%*$50,000*1/2) cash is debited with $1,250 while interest revenue is credited with the same amount.

Upon receipt of face value at redemption,the journal entry would be opposite of the initial one

4 0

3 years ago

professionals who take onwership of their mistakes are said to have: A: a work ethic B: integrity C:dishonesty D:ingenuity

Gwar [14]

The correct answer is B. integrity

7 0

2 years ago