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The quick ratio for ABC Corporation is 2.25 with $4,500,000 in cash, cash equivalents, and accounts receivables. The firm wants to add raw materials (inventory)
The quick ratio for ABC Corporation is 2.25 with $4,500,000 in cash, cash equivalents, and accounts receivables. The firm wants to add raw materials (inventory) using short-term debt, but has a loan covenants saying the quick ratio cannot drop below\ 1.75. How much inventory can ABC Corp add while not violating its loan covenants?\ A) $0\ B) $571,429\ C) $1,333,333\ D) $2,909,091\ E) Infinite (They can
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