Exam 5: Risk Analysis

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Falcon Corporation has current assets of $400,000 and current liabilities of $275,000. Required: Compute the effect of each of the following transactions on Falcon's current ratio: a.Refinanced a $60,000 long-term mortgage with a short-term note. b.Purchasing $108,000 of merchandise inventory with short-term accounts payable. c.Paying $50,000 of short-term accounts payable. d.Collecting $90,000 of short-term accounts receivable.

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