D&R Products forecast a first-year asset requirement of $143,500; therefore, the total debt requirement is
A) $143,500.
B) a set percentage of sales.
C) equal to the current ratio.
D) dependent on the owner's equity amount.

Question

Quizplus · Accepted Answer

The total debt requirement for a company is dependent on the owner's equity amount. This is because the total assets needed (in this case, $143,500) can be financed through a combination of debt and equity. The specific mix of debt and equity used to finance the assets depends on the company's financial strategy and the amount of equity the owners are willing to contribute.

D&R Products Forecast a First-Year Asset Requirement of $143,500; Therefore