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26 September, 17:39

A firm has net working capital of $560. Long-term debt is $3,970, total assets are $7,390, and fixed assets are $3,910. What is the amount of the total liabilities?

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  1. 26 September, 20:27
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    The amount of the total liabilities is $6,890

    Explanation:

    The firm has total assets are $7,390, and fixed assets are $3,910.

    Current assets of the firm = total assets - fixed assets = $7,390 - $3,910 = $3,480

    A firm has net working capital of $560. Long-term debt is $3,970

    Net working capital = Current assets - Current liabilities

    Current liabilities = Current assets - Net working capital = $3,480 - $560 = $2,920

    Total liabilities = Current liabilities + Long-term debt = $2,920 + $3,970 = $6,890
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