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problem: XYZ Corporation is required by a debt agreement to maintain a current ratio of at least 1.5, and XYZ's current ratio now is 2. XYZ wants to buy additional inventory for its upcoming Christmas, & will pay for inventory with short term debt. How much inventory can XYZ buy without violating its debt agreement if their total current assets equal $20 million?

[A] $13.33 million

[B] $6.67 million

[C] $25 million

[D] $10 million

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M923114

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