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earnstyle [38]
2 years ago
9

You have just calculated the acid-test ratio for Peak Performance Sporting Goods [acid test ratio = 1.0]. As a loan officer for

the local bank, you are called into your boss's office to interpret the results of this ratio. Which of the following statements best reflects an understanding of these results?A) A company with an acid-test ratio = 1.0 demonstrates the ability to operate very conservatively. The bank should anticipate that this firm will always be able to meet its short-term liabilities.
B) This company is already having problems meeting its short-term liabilities.
C) An acid-test ratio = 1.0 means that this firm has $1.00 in current assets for every $2.00 in current liabilities. Peak Performance is a well-run operation, as long as it can continue to sell off its inventory.
D) An acid-test ratio = 1.0 tells us that without adequate inventory turnover, this company may represent a higher risk. Peak Performance's acid-test ratio shows that the firm maintains $1.00 in current assets for every $1.00 in current liabilities.
Business
1 answer:
Radda [10]2 years ago
4 0

Answer:

D) An acid-test ratio = 1.0 tells us that without adequate inventory turnover, this company may represent a higher risk. Peak Performance's acid-test ratio shows that the firm maintains $1.00 in current assets for every $1.00 in current liabilities.

Explanation:

The acid test ratio is the ratio which depicts the liquidity of the company. It excludes the inventory, prepaid expenses, etc for calculating it

The formula to compute is shown below:

Acid test ratio is

= Quick assets ÷ current liabilities

Therefore according to the given situation, the correct option is d.

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Every year you pay your neighbor $150 to clean the gutters at your house. You are pretty good friends so you know that your neig
Juliette [100K]

Answer:

$599

Explanation:

The maximum willingness to pay for the Gutter Snipe is the present value of annual payment made to the neighbor.

Annual Payment = $150  

Time = 5 Years

Rate = 0.08

Present Value of Annuity = P*[1 - (1 + r)^-n / r]

                                          = 150*[1 - (1 + 0.08)^-5 /0.08]

                                          = $599

Therefore, The most you would be willing to pay to buy GutterSnipe for your house is $599.

8 0
2 years ago
Kobe is part of a group of managers at Earthbound Engineering examining whether the company should offer some significant new se
melomori [17]

Answer:

C. strategic planning

Explanation:

Strategic planning involves the way or process an organization adopts in determining its strategy, direction and making decisions on how to allocate resources better and implement strategy. It is also the technique which guides and controls the implementation of strategy.

Tools used for strategic planning includes.

1. Growth share matrix.

2.PEST analysis.

3.SWOT analysis.

4.Scenerio planing. etc.

7 0
1 year ago
Read 2 more answers
Demand for a product is​ 12,000 units per year. Every time an order is​ made, the company must pay​ $15.00 per order. The cost t
KATRIN_1 [288]

Answer:

Total cost is $24060

Explanation:

Total demand per year = 12000 units

Size of one order = 3000 units

Total number of orders = 12000 / 3000 = 4

Per order cost = $15

Per unit cost = $2

Below is the calculation to find the total cost.

Total cost = Number of orders × Per order cost + Total demand per year × Per unit cost

Now insert the values.

Total cost = 4 ×15 + 12000 × 2

Total cost = $24060

5 0
2 years ago
A human resource inventory of an organization's employees would include all of the following EXCEPT Multiple Choice specialized
Mademuasel [1]

Answer:

salary levels of employees.

Explanation:

The inventory of human resources is an inventory of the skills and capabilities of employees reflecting their skills, experience, knowledge, attitude, age, gender, interest, data related with their salary, employee training,  etc.

It includes all the basic information of an employee

Therefore it does not includes the salary levels of employees and the rest items are included in this inventory

5 0
1 year ago
Flapper Jack's Pancake Restaurants Inc. sells franchises for an initial fee of $36,000 plus operating fees of $500 per month. Th
Len [333]

Answer:

The journal entry will involve the credit to Unearned franchise fee revenue which amounts to $36,000

Explanation:

The journal entry which is to be recorded for signing the substantial and the collection of note receivable is as:

March 15, 2020

Cash A/c......................................Dr    $36,000

   Unearned franchise fee revenue A/c......Cr   $36,000

As cash is received and that amounts to $6,000, the remaining balance amount of $30,000 being debited to Note receivable will be recognized during the year as and when received. And the Unearned franchise fee revenue for $36,000 is credited because signing date and the performance is yet pending.

3 0
2 years ago
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