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Marcy Corporation's current ratio is currently 1.75 to 1. The firm's current ratio cannot fall below 1.5 to 1 without violating agreements with its bondholders.
Marcy Corporation's current ratio is currently 1.75 to 1. The firm's current ratio cannot fall below 1.5 to 1 without violating agreements with its bondholders. If current liabilities are presently $250 million, what is the maximum new short-term debt that can be issued to finance an equivalent amount for the purchase of fork lift trucks?
A. $41.67 million.
B. $62.50 million.
C. $125.00 million.
D. $375.00 million.
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