Question
Carla Vista Manufacturing Inc. (CVMI) has a loan from the Canadian National Bank to help finance its working capital. The terms of the loan are
Carla Vista Manufacturing Inc. (CVMI) has a loan from the Canadian National Bank to help finance its working capital. The terms of the loan are that the bank will lend CVMI an amount up to 32% of its inventory balance and 50% of its accounts receivable. One of the loan covenants requires that CVMI maintain a current ratio greater than 2.0. Information related to CVMIs current assets and current liabilities is shown in the following table: In thousands 2024 2023 Cash $113 $146 Accounts receivable 884 895 Inventory 1,970 1,526 Other current assets 221 290 Bank loan, current 368 218 Accounts payable 937 1,028 Other current liabilities 36 81 .Based on the loan size requirement only of the loan covenant, what is the maximum amount of loan CVMI could borrow in each year? (Round amounts in thousand to 2 decimal places, e.g. 18.42.) 2024 2023 Maximum loan (in thousands) $enter a dollar amount in thousands rounded to 2 decimal places
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