eBook Problem Walk-Through Current and Quick Ratios The Nelson Company has $1,390,500 in current assets and $515,000
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eBookProblem Walk-Through
Current and Quick Ratios
The Nelson Company has $1,390,500 in current assets and $515,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds as additional notes payable and use them to increase inventory.
How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar.
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What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.
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