Trade credit obligation to supplier in cash

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Reference no: EM13847721

Suppose a firm pays a 50,000$ trade credit obligation to a supplier in cash.

a. What impact does this transaction have on the firm's current ratio if the intial current ratio equaled 1?

b. What impact does this transaction have on the firm's current ratio if the intial current ratio is 0.5?

c. what impact does this transaction have on the firm's current ratio if the intial current ratio equaled 1.7?

Reference no: EM13847721

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