Firm increases its investment in current assets

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Reference no: EM13725532

Which of the following actions would decrease a firm's liquidity?

Select one:

a. selling bonds and holding proceeds in the cash account Incorrect

b. selling stock and reducing accounts payable

c. selling machinery and using proceeds to retire bonds

d. reducing accounts receivable and buying bonds

Which of the following would normally occur if a firm increases its investment in current assets?

Select one:

a. The firm's net working capital would decline. Incorrect

b. The firm's liquidity would be improved.

c. The firm's liquidity would be worsened.

d. The firm's profit margin would improve

Reference no: EM13725532

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