The Nelson Company has $1,444,500 in current assets and $535,000 in current liabilities. Its initial inventory level is $405,000, 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? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.
The Nelson Company has $1,444,500 in current assets and $535,000 in current liabilities. Its initial inventory level is $405,000, 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? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The Nelson Company has $1,444,500 in
current assets and $535,000 in current
liabilities. Its initial inventory level is
$405,000, 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? Do not round
intermediate calculations. Round your
answer to the nearest dollar. $
What will be the firm's quick ratio after
Nelson has raised the maximum amount
of short-term funds? Do not round
intermediate calculations. Round your
answer to two decimal places.
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