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Problem 3-9 Current and Quick Ratios The Nelson Company has $1,200,000 in current assets and $500,000...

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Finance

Problem 3-9 Current and Quick Ratios The Nelson Company has$1,200,000 in current assets and $500,000 in current liabilities.Its initial inventory level is $350,000, and it will raise funds asadditional notes payable and use them to increase inventory. Howmuch can Nelson's short-term debt (notes payable) increase withoutpushing its current ratio below 2.0? Round your answer to thenearest cent. $ What will be the firm's quick ratio after Nelsonhas raised the maximum amount of short-term funds? Round youranswer to two decimal places.

Answer & Explanation Solved by verified expert
3.6 Ratings (348 Votes)
So here Nelson will raise fund as additional notes payable andwill use them to increase    See Answer
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