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AlekseyPX
3 years ago
6

A firm’s liquidity level decreases when:_______.

Business
1 answer:
katovenus [111]3 years ago
5 0

Answer:

b) inventory is sold on credit.

Explanation:

Liquidity is defined as the a business to use its current assets to settle it's current liabilities.

This is calculated by using the working capital ratio.

Working capital ratio = Current assets ÷ Current liabilities.

Cash and inventory contribute to a business' liquidity.

When inventory is sold on credit, it does not result in immediate increase in cash as payment is in the future. So there is a reduction in the current asset of the company.

A reduction in the numerator of the working capital ratio results in lower value of the ratio (lower liquidity)

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$113.86 billion

Explanation:

Real GDP = nominal GDP/ price index

Real GDP =  $14460 billion / 127 = $113.86 billion

I hope my answer helps you

7 0
3 years ago
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3 years ago
Let L1 and L2 be two lotteries with the same expected return. Suppose L2 has a larger variance and you are risk averse. Would yo
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One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing
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