Engle Corporation is evaluating whether to lease or purchase needed equipment at a cost of $500,000. If the equipment is leased, the lease would not have to be capitalized. The company's balance sheet prior to the acquisition of the equipment is shown below.

a. Calculate the company's current debt ratio?

Equipment cost	$500,000
Current Balance Sheet
Current assets	300,000	Debt	400,000
Net Fixed assets	600,000	Equity	500,000
Total assets	900,000	Total claims	900,000

a. Current debt ratio

b. Calculate the company's debt ratio if it purchases the equipment with debt.

c. Calculate the company's debt ratio if it leases the equipment?

d. Will the company's ROA and ROE ratios be affected by its decision to lease or purchase? Why or why not?

e. What factors should the company consider in coming to its decision other than net advantage to leasing? Why?