The nelson company has 1312500 in current assets and 525000, Ask an Expert

Finance

The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds as additional notes payble and use them to increase inventory.

Required:

Question 1: How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0?

Question 2: What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds?

Note: Be sure to show how you arrived at your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91149033

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