Which of the following businesses has the highest risk in terms of asset quality? 1. Business...
- Which of the following businesses has the highest risk in terms of asset quality?
1. Business C has the majority of its assets centered in
accounts receivable due from Fortune 1000 companies.
2. Business D has the majority of its assets centered in short-term
marketable securities and accounts receivable.
3. Business A has the majority of its assets centered in fresh
fish, which is sold to restaurants and supermarkets.
4. Business B has the majority of its assets centered in recycled
bottle inventory, which is sold to numerous plastics
manufacturers.
Homework Answers
Business A has the highest risk, as the assets are perishable in nature.
Business C has low risk, as the credit quality of the accounts receivable is high, since the accounts are of Fortune 1000 companies.
Business D has low risk, as the assets are cash equivalents and accounts receivable.
Business B has low risk, as the assets are inventory which can be converted into cash
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2 through 8 please.
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2 through 8 please.
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