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YHL Ltd is considering entering into a contract for transport services which requires that the firm pays a fixed operating charge each year. Assume that
YHL Ltd is considering entering into a contract for transport services which requires that the firm pays a fixed operating charge each year. Assume that the nature of this services contract, indicates that it will not be defined as a lease in terms of IFRS Alternatively, the company can invest in trucks and logistics facilities to undertake their own transport at an upfront cost of Rm financed with a bank loan. Prior to the transaction, the company's noncurrent assets totalled Rm and its net current assets totalled Rm The firm is currently financed with equity of Rm and longterm debt of Rm What is the debtequity ratio of the firm immediately after, either entering into the service contract, or acquiring the trucks and logistics facilities?
A;
B;
C; D; E;
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