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Rasek [7]
1 year ago
8

Calculate the quick ratio (acid test) based on the following: a firm's current assets are worth $250,000, inventory is valued at

$175,000, and the current liabilities are $100,000.
Business
1 answer:
Studentka2010 [4]1 year ago
7 0

A firm's current assets are worth $250,000, inventory is valued at $175,000, and the current liabilities are $100,000 then the quick ratio is 75.

The quick ratio assesses a company's capacity to satisfy its short-term obligations using its most liquid assets and serves as an indicator of its short-term liquidity position. It is also known as the "acid test ratio" because it shows how quickly the corporation can use its near-cash assets (assets that can be swiftly converted to cash) to settle its present liabilities. A fast test intended to yield immediate findings is referred to as a "acid test" in slang.

Formula of Quick ratio:

Acid Test Ratio = (Cash + Cash Equivalents + Marketable Securities + Current Accounts Receivables) / Total Current Liabilities

To learn more about Quick ratio click here:

brainly.com/question/14615946

#SPJ4

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2 years ago
Tawney Company is considering investing in a new piece of equipment that costs $700,000 and has a $200,000 residual value. The n
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Answer:

average amount invested in the asset =  $450,000

Explanation:

given data

equipment costs = $700,000

residual value = $200,000

cost savings = $60,000

to find out

average amount invested in the asset

solution

we get here Average amount invested  that is express as

average amount invested in the asset = ( Amount invested + Residual value) ÷  2     ........................1

put here value we get

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