(Solved): A. A reduction in inventories will have no effect on the current ratio, holding other things 6. Whi ...

A. A reduction in inventories will have no effect on the current ratio, holding other things 6. Which of the following statements is CORRECT? B. A reduction in inventories will increase the current ratio, holding other things constant. C. An increase in inventories will have no effect on the quick ratio, holding other things constant. D. An increase in inventories will have increase the quick ratio, holding other things constant. 7. Which of the following statements regarding a firm's protitability is INCORRECT assuming constant. the firm's asset and operating profit is unchanged? A. The firm's ROA must decrease if it uses more debt B. The firm' $$\mathrm{ROE}$$ must decrease if it uses more debt C. The firm's profit margin must decrease if it uses more debt D. All of the above For questions 8-12, the interest rate and discount rate are annual rates compounded annually. For Haesfions moch would $$\$5.000$$ due in 20 years be worth today if the discount rate were $$5.5\%$$ ? A. $$\$2,004.96$$ B. $$\$1,713.64$$ C. $$\$2,039.24$$ D. $$\$2,073,51$$ 9. If we place $$\$1,000$$ in a saving account paying $$5\%$$ interest annually, how much will be in our account after 5 years? A. $$\$1,050.00$$ B. $$\$1,276.28$$ C. $$\$1,250.00$$ D. $$\$783.53$$ 10. You just won the Florida lottery. To receive your winnings, you must select ONE of the four following choices. Assume that the current interest rate is $$5\%$$. Which option is most valuable? A. Receive $$\$1,000,000$$ a year at the end of each of the next 30 years. B. Receive $$\$2,000,000$$ a year at the end of each of the next 10 years. C. Receive a one-time payment of $$\$15,000,000$$ today. D. Receive a one-time payment of $$\$20,000,000$$ in 5 years. 11. If you deposit money today in an account that pays $$5\%$$ annual interest, how long will it take to triple your money? A. 10 years B. 15 years C. 14.21 years D. 22.51 years