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 asset is ________. (See Table 15.1)
A) 1:3
B) 3:1
C) 2:3
D) 3:2

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 asset is ________. (See Table 15.1)
A) 1:3 
B) 3:1 
C) 2:3 
D) 3:2

Quizplus · Accepted Answer

The firm's initial ratio of current to total asset is 1:3. This is because the firm's current assets are $100,000 and its total assets are $300,000.

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