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How would affect the value of the company

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Problem 1: A firm has $600,000 in current assets and $150,000 in current liabilities. It decides to use cash to pay off $50,000 in accounts payable. How would it affect the value of the company? If the firm borrows money from a bank (instead of using the cash balance) to pay off the accounts payable, how would it affect the value of the company? Explain your answers carefully.

Reference no: EM132932450

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