Question: Natalie Pendlay the chief financial officer of Mullins Inc is
Natalie Pendlay, the chief financial officer of Mullins Inc., is considering the options available to her for financing the company’s new plant. Short-term interest rates right now are 6%, and long-term rates are 8%. The company’s current ratio is 2.2:1. If she finances the new plant with short-term debt, the current ratio will fall to 1.5:1. Briefly discuss the issues that Natalie should consider.
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