Financial Management: P4-9 The Nelson Company has $1,312,500 in current assets

Financial Management
P4-9 Current and Quick Ratios
The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, 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 2.0?
What will be the firm’s quick ratio after Nelson has raised the maximum amount of short-term funds?
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