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ABC Inc. borrows $50,000 from a bank to finance its operations. Which of the following statements regarding the effect of this transaction on the company's liquidity and profitability metric is true? a.The transaction increases the liquidity and has no effect on the profitability of ABC Inc. b.The transaction decreases the liquidity and increases the profitability of ABC Inc. c.The transaction has no effect on the liquidity and profitability of ABC Inc. d.The transaction increases the liquidity and decreases the profitability of ABC Inc.

ABC Inc. borrows $50,000 from a bank to finance its operations. Which of the following statements regarding the effect of this transaction on the company's liquidity and profitability metric is true? a.The transaction increases the liquidity and has no effect on the profitability of ABC Inc. b.The transaction decreases the liquidity and increases the profitability of ABC Inc. c.The transaction has no effect on the liquidity and profitability of ABC Inc. d.The transaction increases the liquidity and decreases the profitability of ABC Inc.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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    ABC Inc. borrows $50,000 from a bank to finance its operations. Which of the following statements regarding the effect of this transaction on the company's liquidity and profitability metric is true?
    a.The transaction increases the liquidity and has no effect on the profitability of ABC Inc.
    b.The transaction decreases the liquidity and increases the profitability of ABC Inc.
    c.The transaction has no effect on the liquidity and profitability of ABC Inc.
    d.The transaction increases the liquidity and decreases the profitability of ABC Inc.
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