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Assume That a Firm Has Total Assets of $1,000,000 and Current

Question 36

Multiple Choice

Assume that a firm has total assets of $1,000,000 and current liabilities of $700,000. Eighty percent of the assets are current assets. An analyst reviewing this firm's current ratio would most likely conclude that the:


A) firm should have little trouble paying its current debt.
B) firm may experience some trouble paying its debts.
C) firm will definitely experience trouble paying its debts.
D) current ratio is extremely strong.

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