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7.;Consider the same scenario as in the previous question;June Smith, a process engineer, has sold her 15-year patent for a...

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7.;Consider the same scenario as in the previous question;June Smith, a process engineer, has sold her 15-year patent for a new etching process to Silica Labs, Inc. In return, she has received $500,000 in cash and, based on its value on the sale date, $200,000 in common stock in Silica Labs. The stock is forecasted to double in market value over the next two months.;Assuming that Silica Labs holds some long-term debt, which of the following describes the effect of the transaction on Silica Labs?;Current ratio will decrease and total debt to equity ratio will increase;Current ratio will increase and total debt to equity ratio will decrease;Current ratio will increase and total debt to equity ratio will increase;Current ratio will decrease and total debt to equity ratio will decrease

 

Paper#79055 | Written in 18-Jul-2015

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