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Maslowich
4 years ago
6

Baker Corp. is required by a debt agreement to maintain a current ratio of at least​ 2.5, and​ Baker's current ratio now is 3. B

aker wants to purchase additional inventory for its upcoming Christmas​ season, and will pay for the inventory with shortminusterm debt. How much inventory can Baker purchase without violating its debt agreement if their total current assets equal​ $15 million?
Business
1 answer:
Orlov [11]4 years ago
7 0

Answer:

$1.67 Million

Explanation:

Current asset = 15 Million    

Current liabiltiy = 15 Million/3

                          = 5 Million    

Let the inventory X can be purchased with short term debt without violation

per current ratio requirement    

(15 + x)/5+x = 2.5    

       15 + x  = 12.5 + 2.5x    

            2.5 = 1.5x    

               x = $1.67 Million

Therefore, $1.67 Million inventory can Baker purchase without violating its debt agreement if their total current assets equal​ $15 million

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2 years ago
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1 year ago
Recently, the spot market price of U.S. hot rolled steel plummeted to $400 per ton. Just one year ago, this same ton of steel co
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Answer:

The computation of given question is shown below:-

Explanation:

One year ago

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7 0
3 years ago
If the exchange rate for Canadian and U.S. dollars is 0.92777 to 1, this implies that 13 Canadian dollars will buy ____ worth of
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Answer:

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U.S. dollars = 14.012 U.S. dollars

8 0
3 years ago
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