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The balance sheet for Shaver Corporation reported the following: cash, $9,000, short-term investments, $14,000; net accounts receivable, $43,000; inventories, $48,000, prepaids, $14.000; equipment, $105,000, current

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The balance sheet for Shaver Corporation reported the following: cash, $9,000, short-term investments, $14,000; net accounts receivable, $43,000; inventories, $48,000, prepaids, $14.000; equipment, $105,000, current liabilities, $48,000, notes payable (long. term). $78,000, total stockholders' equity, $107.000, net income, $4,120; interest expense, $6,000, income before income taxes, $7,680 1. Compute Shaver's debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.) Ratio Debt.to Assets Times Interest Eamed 2-a. Based on these ratios, does it appear Shaver relles mainly on debt or equity to finance its assets? Debt Equity 2.b. Is it probable that Shaver will be able to meet its future interest obligations? Yes No

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