Table 15.1
Irish Air Services has determined several factors relative to its asset and financing mix.
(a) The firm earns 10 percent annually on its current assets.
(b) The firm earns 20 percent annually on its fixed assets.
(c) The firm pays 13 percent annually on current liabilities.
(d) The firm pays 17 percent annually on long-term funds.
(e) The firm's monthly current, fixed, and total asset requirements for the previous year are summarized in the table below:
-The firm's initial ratio of current to total assets is ________. (See Table 15.1)
A) 1:3.2
B) 3:1
C) 2:3
D) 3:2.3

Question

Table 15.1
Irish Air Services has determined several factors relative to its asset and financing mix.
(a) The firm earns 10 percent annually on its current assets.
(b) The firm earns 20 percent annually on its fixed assets.
(c) The firm pays 13 percent annually on current liabilities.
(d) The firm pays 17 percent annually on long-term funds.
(e) The firm's monthly current, fixed, and total asset requirements for the previous year are summarized in the table below: 
-The firm's initial ratio of current to total assets is ________. (See Table 15.1)
A) 1:3.2 
B) 3:1 
C) 2:3 
D) 3:2.3

Quizplus · Accepted Answer

The initial ratio of current to total assets is calculated by dividing the initial current assets ($800,000) by the initial total assets ($2,560,000), which equals 0.3125 or approximately 1:3.2.

Table 15.1 Irish Air Services Has Determined Several Factors Relative to Its