THE ANSWER IS NOT 0.52 AND 0.41....

Leasing

Connors Construction needs a piece of equipment that can either be leased or purchased. The equipment costs $200. One option is to borrow $200 from the local bank and use the money to buy the equipment. The other option is to lease the equipment. If Connors chooses to lease the equipment, it would not capitalize the lease on the balance sheet. Below is the company's balance sheet prior to the purchase or leasing of the equipment:

Current assets	$250		Debt	$350
Fixed assets	600		Equity	500
Total assets	$850		Total liabilities and equity	$850

What would be the company's debt ratio if it chose to purchase the equipment? Round your answer to two decimal places. %

What would be the company's debt ratio if it chose to lease the equipment? Round your answer to two decimal places. %