Current and Quick RatiosThe Nelson Company has $1,187,500 in current assets and $475,000 in current liabilities. Its initial inventory level is $345,000, and it will raise funds as additional notespayable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not roundintermediate calculations. Round your answer to the nearest dollar.$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 twodecimal places.

The current asset for the Nelson Company is $1187500.The current liabilities is $475000.The initial…

Answered: Current and Quick Ratios The Nelson…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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