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At the end of the month, Sara notices that she has the following balances in her ledger:
Account | Amount |
Cash | $300 |
Checking Account | 900 |
Monthly Car Payment | 350 |
Credit Card Balance | 800 |
Monthly Wage Income | 2,000 |
Certificate of Deposit | 3,000 |
Car | 5,800 |
Other Illiquid Investment Assets | 1,600 |
Monthly Clothing Expense | 100 |
Monthly Food Expense | 300 |
Monthly Interest Expense | 30 |
Car Loan Balance | 4,200 |
Monthly Rent | 750 |
Monthly Interest and Dividend Income | 120 |
Impulse and Miscellaneous Expenses | 180 |
Savings Account | 800 |
1. How rich is Sara? (The liabilities reflect values after current bills have already been paid. Therefore, do not include current expenses as debts.)
2. What is Sara's liquidity ratio?
3. Which of the following is the best indicator of Sara"s solvency?
4.
What was Sara's net gain last month?
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