Engineering Economics
Current assets less inventories divided by current liabilities is known as

Liquidity ratio
Acid-Test (or Quick) ratio
Debts ratio
Current ratio

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Engineering Economics
Liquidity ratios are used:

To measure a firm’s ability to meet short-cut obligations
To obtain much insight into the present cash solvency of the firm and the firm
To compare short term obligations to short-term resources available to meet these obligations
All of these

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Engineering Economics
It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate?

0.1602
0.1647
0.1628
0.1632

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