Answer:
true
Explanation:
acid test ratio can be calculate by ( Current assets – Inventory ) / Current liabilities. Ideally, the acid test ratio should be 1:1 or higher, however this varies widely by industry. In general, the higher the ratio, the greater the company's liquidity. by selling up equipment in exchange of cash, the will assist the company to be able to handle its current liability with the cash injection into the entity.
Answer:
The return from the bond is 5% per year before tax. And the tax is 32%.
After tax rate of return = Interest rate * (1-tax rate)
= 5% * (1-32%)
= 0.05 * 0.68
= 0.034
= 3.4%
Thus, the after tax of return from the bond is 3.4%
The interest of the taxable income corporate bond is taxed annually. Hence, the change in the investment maturity period would not affect the after tax rate of return from bond. The annual after tax rate of bond would not change irrespective of the investment maturity period. The after tax rate of return of corporate bonds would be the same 3.4% even in the case of 10 years maturity period.