Santana Rey has consulted with her local banker and is considering financing an

Question

Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2016, for Business Solutions follow.The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.77. As of March 31, 2016, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations to the nearest dollar amount.)

Explanation / Answer

The maximum amount that can be borrowed should not exceed 0.77

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