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Snowball &Company has the following balance sheet: Current assets $ 7,000 A/P& Accruals1,500 Fixed assets 3,000 S-T (3-month) Loans 2,000 Common Stock Ret. Earnings 1,500

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Snowball &Company has the following balance sheet: Current assets $ 7,000 A/P& Accruals1,500 Fixed assets 3,000 S-T (3-month) Loans 2,000 Common Stock Ret. Earnings 1,500 PMN Total assets $10,000 Total claims $10,000 les Snowball's after-tax profit margin is 11 percent, and the company pays out 60 percent of its earnings as dividends. Its sales last year were $10,000; its assets were used to full capacity; no economies of scale exist in the use of assets; and the profit margin and payout ratio are expected to remain constant. The company uses the AFN equation to estimate funds requirements, and it plans to raise any required external capital as short-term bank loans. If sales grow by 50 percent, what will Snowball's current ratio be after it has raised the necessary expansion funds? (Note: Ignore any financing feedback effects)

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