Table 14.2 The company earns 5 percent on current assets and 15 percent on fixed assets.The firm's current liabilities cost 7 percent to maintain and the average annual cost of long-term funds is 20 percent.
-The firm's initial ratio of current assets to total assets is ________.(See Table 14.2)
A)3:1
B)1:3
C)2:1
D)2:3

Question

Table 14.2  The company earns 5 percent on current assets and 15 percent on fixed assets.The firm's current liabilities cost 7 percent to maintain and the average annual cost of long-term funds is 20 percent.
-The firm's initial ratio of current assets to total assets is ________.(See Table 14.2)
A)3:1 
B)1:3 
C)2:1 
D)2:3

Quizplus · Accepted Answer

The ratio of current assets to total assets is 1:3, meaning current assets are one-third of the total assets.

Table 142 the Company Earns 5 Percent on Current Assets