E2-9 (The effects of different forms offinancing on financial statement numbers and debt covenants) Suppose the retail company in E2-8 signed a debt covenant specifying that current assets must be maintained at an amount twice the size of current liabilities. Assume further that in early January of 1997 the company plans to purchase $5,000 worth of inventory and has three pos¬ sible methods of paying for it: (1) cash, (2) accounts payable, or (3) long-term note payable. Compute the effect of each of the three alternatives on the ratio of current assets to current lia¬ bilities, and discuss which method seems to be the most feasible.