Additional notes payable and use them to increase inventory

Assignment Help Financial Management

Reference no: EM131020839

The Nelson Company has $1,000,000 in current assets and $400,000 in current liabilities. Its initial inventory level is $200,000, 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 2.3? Round your answer to the nearest cent.

What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

Reference no: EM131020839

Questions Cloud

What should the value of the stock be : The last dividend was $2.50, but now is expected to grow at 10% forever, and Ke remains 25%, what would the price be now? Things are not as great as originally thought. The last dividend was $2.50. It is expected to grow by 10% for only the next 3 y..

Line of credit to fill temporary cash shortfalls : Which of the following financial ratios/percentages would be the most likely reason for a bank to NOT approve a company’s application for a line of credit to fill temporary cash shortfalls?

Record the correcting entry for errors discovered : Prepare the appropriate correcting entry assuming the error was discovered in 2016 before the adjusting and closing entries. (Ignore income taxes.)

What is the total amount of interest that will pay : Jeff buys a house for $220,000. He makes a 10% down payment and nances the remaining balance with a 15 year mortgage. The annual interest rate is 2.875% and interest is compounded monthly. What is the total amount of interest that Jeff will pay?

Additional notes payable and use them to increase inventory : The Nelson Company has $1,000,000 in current assets and $400,000 in current liabilities. Its initial inventory level is $200,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term..

What is washington-pacific expected rate of return : Washington-Pacific (W-P) invests $3 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 14 years, at which time W-P plans to sell the forest at an expected price of $6 million. What is W-P's expected rate of ..

Tax adjustment to determine the aftertax cost of debt : Russell Container Corporation has a $1,000 par value bond outstanding with 20 years to maturity. The bond carries an annual interest payment of $126 and is currently selling for $980 per bond. Russell Corp. is in a 30 percent tax bracket. Make the ap..

The company expects to extract : The company expects to extract 1,090,000 tons of coal during a four-year period. During 2016, 259,000 tons were extracted and sold immediately.

Present value of an annuity : Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. This ..

User Account

All Pages