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RC Company has several loans outstanding with a local bank. The debt agreements all contain a covenant stipulating that Raintree must maintain a current ratio

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RC Company has several loans outstanding with a local bank. The debt agreements all contain a covenant stipulating that Raintree must maintain a current ratio of at least 0.9. The company estimates that if nothing is done the 2020 year-end current assets and current liabilities will be $2,100,000 and $2,400,000, respectively. These estimates provide a current ratio of only! 0.875. Violation of the debt agreement will increase Raintree's borrowing costs as the loans are renegotiated at higher rates. The company has the following options that may or may not affect the current ratio, Option 1. Provide incentives to one of our customers who borrowed a large amount to pay up quickly. Option 2. Purchase a large amount of office supplies with cash Option 3. Pay a large dividend to shareholders. Option 4. Ask skareholders to make a large additional investment to paid in capital. Option 5. Borrow a large amount of additional cash by signing a three-year note. Option 6. Purchase a large amount of inventory on credit before year-end. Requirement A. 1 point. Which of these options will improve the company's current ratio? Requirement B. 1 point for exceptional work; must get requirement 1 correct to get credit: default for good work 0.75 points). Discuss the benefits and drawbacks of each of the options that will improve the company's current ratio (only discuss alternatives identified in requirement A that will improve the current ratio). Requirement C. Which option would you recommend to the company and why? You may also suggest additional options not mentioned above. (Credit based on how clearly and convincingly

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