The Nelson Company has $1,207,500 in current assets and $525,000 in current liabilities

Asked by bizgrad
Dated: 19th Apr'15 02:11 AM
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The Nelson Company has $1,207,500 in current assets and $525,000 in current liabilities.​

The Nelson Company has $1,207,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $315,000, and it will raise funds as additional notes payable and use them to increase inventory.
How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Round your answer to the nearest cent.
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What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

The Nelson Company has $1,207,500 in current assets and $525,000 in current liabilities.
Answered by bizgrad
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Dated: 19th Apr'15 02:11 AM
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Nelson_Company.xls