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FIN 600 - The Crown Carpet Company has $3,000,000 in cash and a total of $12,000,000

Question # 00622068
Subject: Finance
Due on: 11/25/2017
Posted On: 11/25/2017 12:42 PM

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(Liquidity analysis) The Crown Carpet Company has $3,000,000 in cash and a total of $12,000,000 in current assets. The firm's current liabilities equal $6,000,000 such that the firm's current ratio equals 2. The company's managers want to reduce the firm's cash holdings down to $1,000,000 by paying $500,000 in cash to expand the firm's truck fleet and using $1,500,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?

Tags total 0 cash 1 carpet company crown firms cash current ratio expand truck 0 paying holdings 1 fleet happen plan shortterm note retire 2 using reduce carry companys 3 total company carpet analysis crown 4 aets liquidity

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FIN 600 - The Crown Carpet Company has $3,000,000 in cash and a total of $12,000,000

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