1. A company's current ratio is 2. According to the fine print in its bond agreements, the

company cannot allow its current ratio to fall below 1.5 without defaulting on the debt

and going into bankruptcy. If current liabilities are P200,000, what is the maximum

amount of additional new short-term debt the company can take on without defaulting

if the new debt is used to finance new current assets?

2. Last year Jasmine Company purchased P500,000 of inventory. The cost of goods sold

was P550,000 and the ending inventory was P100,000. The inventory turnover for the

year was:

3. .Ilang ilang Co.'s budgeted sales and budgeted cost of sales for the coming year are

P212,000,000 and P132,500,000 respectively. Short-term interest rates are expected to

be 5%. Assume that all inventory must be financed with short-term debt. If the company

could increase inventory turnover from its current 8 times per year to 10 times per

year, its expected interest cost savings in the current year would be: