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You obtain the following balance sheet for Moonlimited (in thousands of dollars): Assets Liabilities Cash $800 Debt $3200 Property, Plant, and Equipment $7200 Equity $4800
You obtain the following balance sheet for Moonlimited (in thousands of dollars):
Assets |
| Liabilities |
|
Cash | $800 | Debt | $3200 |
Property, Plant, and Equipment | $7200 | Equity | $4800 |
Total Assets | $8000 | Total Debt plus Equity | $8000 |
Moonlimited is considering adding a new machine, which will cost Moonlimited $2 million if Moonlimited purchases this new machine. If Moonlimited acquires the new machine through a capital lease, its Debt to Value ratio will be closest to:
a. 0.40
b. 0.65
c. 0.32
d. 0.52
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