Answer to Question 1
A current ratio of 0.80 means that for every 1 of current liabilities, Ima's business has only 0.80 available in current assets. She has borrowed too much money and will not be able to pay the debts with her current assets. She must rely on current cash flows to cover her debt payments. Ima should concentrate on paying her debts. At the same time, she should try to increase the amount of her current assets, particularly cash.
Answer to Question 2
c