(Liquidity Analysis) The King Carpet Company has $2,860,000 in cash and a total of $11,910,000 in current assets. The firm's current liabilities equal $5,760,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings down to $1,170,000 by paying $535,000 in cash to expand the firm's truck fleet and using $1,155,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio? The new current ratio is (Round to one decimal place.)

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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(Liquidity Analysis) The King Carpet Company has $2,860,000 in cash and a total of $11,910,000 in current assets.
down to $1,170,000 by paying $535,000 in cash to expand the firm's truck fleet and using $1,155,000 in cash to retire
The new current ratio is
(Round to one decimal place.)
The firm's current liabilities equal $5,760,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings
short-term note. If they carry this plan through, what will happen to the firm's current ratio?
C
Transcribed Image Text:(Liquidity Analysis) The King Carpet Company has $2,860,000 in cash and a total of $11,910,000 in current assets. down to $1,170,000 by paying $535,000 in cash to expand the firm's truck fleet and using $1,155,000 in cash to retire The new current ratio is (Round to one decimal place.) The firm's current liabilities equal $5,760,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings short-term note. If they carry this plan through, what will happen to the firm's current ratio? C
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