Question
Need insight on question b. please COMPANY ABC Accounts payable $510,000 , Notes payable $256,000, Current liabilities $766,000, Long-term debt $1,114,000, Common equity $4,779,000, Total
Need insight on question b. please COMPANY ABC
Accounts payable $510,000 , Notes payable $256,000, Current liabilities $766,000, Long-term debt $1,114,000, Common equity $4,779,000, Total liabilities & equity $6,659,000
a.What percentage of the firm's assets does the firm finance using debt (liabilities)? The fraction of the firm's assets that the firm finances using debt is 28.2%.
b. If ABC were to purchase a new warehouse for $ 1.1 million and finance it entirely with long-term debt, what would be the firm's new debt ratio? The new debt ratio will be %_________. (Round to one decimal place.)
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