1. The Petry Company has $1,587,500 in current assets and $682,625 in current liabilities. Its initial inventory level is $365,125, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0? Round your answer to the nearest cent.
2. Provide a Capital Investment Appraisals (CIA) analysis of the the costs of using debt and equity financing (include definitions).
Also evaluate the criteria used when making financing decisions.