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    Question

    The _________ of a business firm is measured by its

    ability to satisfy its short-term obligations as they become due.
    A Activity Correct Answer Incorrect Answer
    B Liquidity Correct Answer Incorrect Answer
    C Debt Correct Answer Incorrect Answer
    D Profitability Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Liquidity refers to the ability of the firm to pay off its current liabilities (or short term obligations) as and when they fall due.

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