Hindelang Corporation 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 through additional notes payable and use them to increase inventory. How much can Hindelang’s short-term debt (notes payable) increase without pushing its current ratio below 2.0? What will be the firm’s quick ratio after Hindelang has raised the maximum amount of short-term funds?
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