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The Nelson Company has $1,500,000 in current assets and $600,000 in current liabilities. Its initial inventory level is $240,000, and it will raise funds as
The Nelson Company has $1,500,000 in current assets and $600,000 in current liabilities. Its initial inventory level is $240,000, and it will raise funds as additional notes payable and use them to increase inventory. Find out how much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0.What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds?
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