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Baker Corp

Question 113

Multiple Choice

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.Baker wants to purchase additional inventory for its upcoming Christmas season,and will pay for the inventory with short-term debt.How much inventory can Baker purchase without violating its debt agreement if their total current assets equal $15 million?


A) $0.50 million
B) $1.67 million
C) $4.50 million
D) $6.00 million

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