HG Lang Designs operates an exclusive bridal boutique in Manhattan. All gowns are designed by Lang but are manufactured by various small firms in France and Italy. The following financial information for the company 

HG Lang is planning to open a new store in Miami that will be financed in part by a new bank loan of $1,500,000. 

Required      

a. Assuming debt was $1,500,000 higher in 2021, what would the debt-to-equity ratio have been?      

b. Assume that the additional debt will add $110,000 of interest expense. What would times interest earned have been in 2021 if interest expense had been $110,000 higher?      

c. Assume you are a bank manager evaluating the potential $1,500,000 loan to HG Lang. Explain why you would or would not be favorably inclined to make the loan.

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HG Lang Designs Balance Sheets December 31, December 31, 2021 2020 Assets Current assets: $ 65,000 $ 88,000 333,200 Cash Accounts receivable 352,000 Inventory 1,795,000 1,764,000 Other current assets 62,000 65,000 Total current assets 2,274,000 2,250,200 Buildings, furniture, and fixtures, net 1,611,000 1,611,000 Total assets $3,885,000 $3,861,200 Liabilities and Stockholders' Equity Current liabilities: $ 73,000 $ 65,200 Accounts payable Bank loan payable Other accrued payables 89,000 110,000 13,000 11,000 Total current liabilities 175,000 186,200 Long-term debt 311,000 366,000 Total liabilities 486,000 552,200 Stockholders' equity: Common stock 1,248,000 1,248,000 Retained earnings 2,151,000 2,061,000 Total stockholders' equity 3,399,000 3,309,000 Total liabilities and stockholders' equity $3,885,000 $3,861,200