Problem: Assuming that the current ratio is currently 2, which of the following actions will increase it?
1. Purchasing inventory with cash.
2. Purchasing inventory on short-term credit.
3. Paying off a short-term bank loan with long-term debt.
4. None of the above increase the current ratio.
5. All of the above increase the current ratio.
In future value problems, the discount rate is adjusted:
- upward to reflect higher risk and to increase the future cash flows.
- upward to reflect higher risk and to reduce the future cash flows.
- downward to reflect higher risk and to increase the future cash flows.
- downward to reflect higher risk and to reduce the future cash flows.
- None of the above.