Marcy Corporation's Current Ratio Is Currently 1

Marcy Corporation's current ratio is currently 1.75 to 1.The firm's current ratio cannot fall below 1.5 to 1 without violating agreements with its bondholders.If current liabilities are presently $250 million,what is the maximum new short-term debt that can be issued to finance an equivalent amount of inventory expansion?

A) $41.67 million.
B) $62.50 million.
C) $125.00 million.
D) $375.00 million.

Correct Answer:

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