one of the following actions will increase the current ratio, all else constant?
ID: 2797698 • Letter: O
Question
one of the following actions will increase the current ratio, all else constant? Assume the current ratio is greater than 1.0. a. Cash purchase of inventory b. c. Cash payment of an account payable Cash payment of an account receivable d. Credit sale of inventory at cost Choose the term that describes the implicit spot exchange rate between two currencies quoted in some third currency a. Cross-rate b. Purchasing power parity c. London Interbank Offer Rate d. Swap Choose the term that describes the price of one country's currency expressed in terms of another country's currency. 9. a. Future rate b. Exchange rate c. Prime rate d. London Interbank offer rate 10. A trader in Canada just agreed to trade Canadian dollars for U.S. dollars based on today's exchange rate. The trade is expected to settle tomorrow. What term best describes this exchange? a. spot trade b. forward trade c. futures trade d. backward trade 11. Which of the following is the BEST description of the goal of the financial manager in a corporation? a. Maximize earnings per share b. Maximize market share c. Maximize the number of shareholders d. Maximize the wealth of the owners, (shareholders) 12· The determination of what happens to net present value estimates when we ask what if questions (i.e. multiple project variables are changed simultaneously) is called... a. forecasting analysis b. scenario analysis c. sensitivity analysis d. simulation analysisExplanation / Answer
7.Answer is c.cash payment of an account Payable. This will rather increase the existing Current ratio, For eg. if the Current Assets were $15000 and Current Liabilities were $10,000 then the Current ratio would have been 15000/10000= 1.5 , Now after the cash payment of an account payable Eg.$5000, Current assets(cash) will increase by $5000 to become $20000 whereas the Current Liabilities(Creditors) will decrease by $5000 so that Current Liabilities = $5000. New Current ratio = 20000/5000 = 4
8. Answer is a. cross-rate. A cross rate is the currency exchange rate between two currencies when neither are official currencies of the country in which the exchange rate quote is given. Foreign exchange traders use the term to refer to currency quotes that do not involve the U.S. dollar, regardless of what country the quote is provided in.
9. Answer is b.Exchange Rate. An exchange rate is the price of a nation’s currency in terms of another currency.
10. The answer is b. Forward trade. A trade which is executed in future but the terms of the trade( Price and volume) are fixed in advance today is refered to as the Forward trade.
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