Firms initial ratio of current to total asset

Question

Problem: The firm's initial ratio of current to total asset is ?

Plum Packages Inc

Assets                                  Liabilities and Equity
Currents assets    $10,000     Current liabilites    $5,000
Fixed assets           20,000     Long term debt     12,000
Equity                    13,000     Equity                  13,000
Total                      30,000     Total                    30,000

The company earns 5% on currents assets and 15% on fixed assets. The firm's current liabilites cost 7% to maintain and the average annual cost of long term funds is 20%