LEASING Connors Construction needs a piece of equipment that can be leased or pur- chased. The equipment costs $100. One option is to borrow $100 from the local bank and use the money to buy the equipment. The other option is to lease the equipment. The company's balance sheet prior to the equipment purchase or lease is shown below: Current assets $300 Debt $400 Fixed assets 500 Equity 400 Total assets $800 Total liabilities and equity $800 What would be the company's debt ratio if it chose to purchase the equipment? What would be the company's debt ratio if it leased the equipment and it could keep the lease off its balance sheet? Is the company's financial risk any different whether the equipment is leased or purchased? Explain