Answer:
A) Fluctuating market prices of short-term investments may adversely affect the ratio.
Explanation:
The quick ratio (or acid test) measures a company's ability to pay short term liabilities using its liquid assets. usually the best quick ratio is 1, because it means that your liquid current assets cover completely your current liabilities.
There are two formulas to calculate the quick ratio:
- quick ratio = (cash + marketable securities + accounts receivables) / current liabilities
- quick ratio = (current assets - inventory - prepaid expenses) / current liabilities
The quick ratio includes the value of short term investments, and any fluctuation in their price may affect the ratio.
Answer:
The companies create a global web of value creation activities.
Explanation:
When the companies with the motive to maximize revenue or minimize cost disperse their operation across the globe they create a chain or web of value creation activities globally.
Multinational companies take advantage of location economies by dispersing their activities. When a firm operates in foreign countries they hire inputs for their work thus paying for them, in this way they create a web of activities boosting the economy of that place.
Answer:
c) the marginal cost of capital
Explanation:
The cost which a company bears to add one dollar / unit of capital is called marginal cost. We know that the company raise funds through different sources which can be debt from banks and stocks (common and preferred). This process of raising capital involves a cost which is termed as marginal cost of capital or the cost required to raise an additional unit of capital.
The British government borrowed from the Dutch and British bankers and this increase its national debt from $75 million to $133 million.
<h3>What is a
national debt?</h3>
This means the total amount of all debts owed by the government of a country.
These debt are used to service infrastructure, cater expenditure when there are insufficient revenue to cater for such.
Therefore, the British government borrowed from the Dutch and British bankers.
Read more about national debt
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