ACR Corp. has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inven- tory level is $375,000, and it will raise funds from additional notes payable and use them to increase inventory. How much can it increase its short-term debt (notes payable) without pushing its current ratio below 2.0?

ACR Corp. has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inven- tory level is $375,000, and it will raise funds from additional notes payable and use them to increase inventory. How much can it increase its short-term debt (notes payable) without pushing its current ratio below 2.0?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2P: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in...

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