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A. Increase the current ratio.
B. Decrease the current ratio.
C. Increase net working capital.
D. Decrease net working capital.
Right answer is ( B ) Decrease the current ratio because curent liabilties increase due to increase in current liability current ratio is decrease.
No effect................................ Liability and asset will be same as before
B) decrease in current ratio>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
There current ratio will decrease and working capital will remain constant
the answer is ( A ) increasing the current ratio
decrease net working capital
will decrease the current ratio both current liabilities and current assets will increase by the same amount which is85000 but because the ratio is greater than1 current liabilities will increase by a greater percentage and so the ratio will drease
INCREASE NET WORKING CAPTIAL
Answer is B (Decrease the current ratio)
All answer are False
the current Ratio and Working capital will be constant due to the equal increase in current asset ans current liabilities
Thanks
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