A Firm Has a Current Ratio Greater Than 1 A) Option a
B) Option B
C) Option C
D)

A firm has a current ratio greater than 1.0. During the course of the year the firm sells $60M of accounts receivable with limited recourse. If it had not sold the receivables it would have to have taken out a short-term loan. The effect of selling the receivables is: $$\begin{array} { | l | c | c | } \hline & \text { Accounts Receivable Turnover } & \text { Current Ratio } \\\hline \text { A) } & \text { higher } & \text { lower } \\\hline \text { B) } & \text { higher } & \text { higher } \\\hline \text { C) } & \text { lower } & \text { lower } \\\hline \text { D) } & \text { lower } & \text { higher } \\\hline\end{array}$$

A) Option A
B) Option B
C) Option C
D) Option D

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