Question
Luther Industries currently has the following balance sheet (in thousands of dollars): Current assets $2,000 Property, Plant, and Equipment $7,000 Total Assets $8,000 Debt $4,000
Luther Industries currently has the following balance sheet (in thousands of dollars):
Current assets $2,000
Property, Plant, and Equipment $7,000
Total Assets $8,000
Debt $4,000
Equity $5,000
Total Debt plus Equity $8,000
Luther is about to add a new fleet of delivery trucks. The price of the fleet of trucks is $2,786. If Luther acquires the new fleet of delivery trucks using an operating lease, what will be Luthers Debt to Equity ratio? Present your answer in percentage terms, rounded to 1 decimal place (e.g., 54.3%). Note: The debt to equity ratio is defined as total debt divided by total equity.
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