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2(b)(ii)2 marks

Motorcycle Components (MC)

Liquidity management is very important in the motorcycle component industry. The industry average for the acid test ratio is 1. A summary of some key data for MC has been prepared by the Finance Director.

Explain one reason why the acid test ratio is useful to MC's Finance Director.

9609/21/M/J/22Cambridge International AS & A Level Business 9609 · May/June 2022 · Paper 2 variant 1 · Question 2(b)(ii)

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Suggested time: 3 min