The balance sheet as of December 31, 2020, for Manheim Corporation follows:

Assets	Liabilities and Shareholders' Equity
Current assets $85,000	Current liabilities $70,000
Noncurrent assets 125,000	Long-term liabilities 40,000
Shareholders' equity 100,000
Total assets $210,000	Total liabilities and shareholders' equity $210,000

INSTRUCTIONS:

1. Compute Manheim Corporations long-term debt/equity ratio.
2. Assume that Manheim Corporation is considering borrowing money and signing a five-year note with the following terms:

Face value	$40,000
Stated interest rate	0%
Effective interest rate	11%

Compute the proceeds of the note ,and compute the companys long-term debt/equity ratio if it decides to borrow the money.

3. Assume that Manheim Corporation is considering issuing bonds that mature on December 31, 2040. The bonds have a face value of $40,000, a stated interest rate of 10 percent, and an effective interest rate of 8 percent. Compute the proceeds from the bond issuance, and compute the companys long-term debt/equity ratio if it issues the bonds. The bonds pay interest semiannually.