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What is the investment in operating capital

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Reference no: EM133125642

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Q1. You collected the following data on a company:

 

2020

2021

NOWC

$850

$1,000

Net PP&E

$1,780

$2,000

Based on the relevant data, what is the investment in operating capital in 2021?

a. $520

b. $220

c. $150

d. $370

Q2. A company had $100,000 in inventories. A flood destroyed all the inventories and the company had no insurance on them, reducing their value to zero on the balance sheet. What is the net (final) effect of these events on the quick ratio? Feel free to give a hypothetical value for current assets to help with the assessment of these events.

a. The quick ratio will decrease.

b. The quick ratio will increase.

c. The quick ratio will stay the same.

Q3. A company had $100,000 in inventories. A flood destroyed all the inventories. However, the company had full insurance on them and received $100,000 in cash from the insurance company. What is the net (final) effect of these events on the quick ratio? Feel free to give a hypothetical value for current assets to help with the assessment of these events.

a. Quick ratio will go up

b. Quick ratio will go down

c. Quick ratio will stay the same

Reference no: EM133125642

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