1. (Evaluating liquidity) The Allen Marble Company has a target current ratio of 2.6 but has experienced some difficulties financing its expanding sales in the past few months. At present the firm has current assets of $3.3 million and a current ratio of 3.3. If Allen expands its receivables and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?
The addition to current assets is (Round to the nearest dollar.)
2. A company borrows $10,000 and puts the money into its checking account. This transaction will increase the company's current ratio if prior to the transaction the company's current ratio was
A. equal to one.
B. greater than or less than one, but not equal to one.
C. greater than one.
D. less than one.