If mitchem expands its receivables and inventories using, Ask an Expert

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The Mitchem Marble Company has a target current ratio of 2.0 but has experienced some difficulties financing its expanding sales in the past few months. At present the firm has a current ratio of 2.5 and current assets of $2.5 million.

If Mitchem expands its receivables and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?

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