A current ratio greater than 1 can tell us that the company ________
A) should be able to cover the current liabilities
B) should be able to keep away from short-term cash problems
C) may have too much capital tied up in current assets
D) All of these
Answer: D
Explanation: D) A current ratio greater than 1 tells us that the current assets should be able to cover the current liabilities and keep the company away from short-term cash problems. However, if this number is much greater than 1, we may have too much capital tied up in current assets.
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The ________ states that an acceptance is effective when it is dispatched, even if it is lost in transmission
A) rule of silence as acceptance B) mirror image rule C) mailbox rule D) mutual assent rule
Net present value (NPV) assumes that intermediate cash inflows are reinvested at the cost of capital, whereas internal rate of return (IRR) assumes that intermediate cash inflows can be reinvested at a rate equal to the project's IRR
Indicate whether the statement is true or false