Use the table for the question(s)below.

-Consider the above balance sheet for your firm (in thousands of dollars).You plan on acquiring some new equipment using a $700,000 operating lease.If you go through with the lease,what will be the change in your firm's debt-equity ratio?
A)0.44
B)0.56
C)0
D)0.80
E)1.69

Question

Use the table for the question(s)below.
 
-Consider the above balance sheet for your firm (in thousands of dollars).You plan on acquiring some new equipment using a $700,000 operating lease.If you go through with the lease,what will be the change in your firm's debt-equity ratio?
A)0.44 
B)0.56 
C)0 
D)0.80 
E)1.69

Quizplus · Accepted Answer

The operating lease is not considered as a debt on the balance sheet, so it will not affect the debt-equity ratio. Therefore, the change in the debt-equity ratio will be 0.

Use the Table for the Question(s)below