1. Baker Corp. is required by a debt agreement to maintain a current ratio of at least 2.5, and Baker's current ratio now is 3. Baker wants to purchase additional inventory for its upcoming Christmas season, and will pay for the inventory with short-term debt. How much inventory can Baker purchase without violating its debt agreement if their total current assets equal $15 million?
A) $0.50 million B) $1.67 million C) $4.50 million D) $6.00 million
2. Manny and Irene will be retiring in fifteen years and would like to buy a Mexican villa. The villa costs $500,000 today, and housing prices in Mexico are expected to increase by 6% per year. Manny and Irene want to make fifteen equal annual payments into an account, starting next year, so there will be enough money to purchase the villa in fifteen years. If the account earns 10% per years, what is the amount of each deposit?
A) $79, 885 B) $ 72, 623 C) $37, 714 D) $30, 947