Mike and Amanda Have Been Reviewing Their Financial Statements

question 6

Multiple Choice

Mike and Amanda have been reviewing their financial statements.Using the following information,they have asked you to determine their debt safety ratio and advise them about assuming more debt in the future.

• A) Mike and Amanda have a manageable debt ratio and can assume more debt.
• B) Mike and Amanda have a debt ratio that is very low and can consider assuming more debt.
• C) Mike and Amanda have a debt ratio around the danger range and should wait before assuming more debt.
• D) Mike and Amanda have a debt ratio that is very high and should assume no more debt.
• E) It is impossible to tell what they should do.

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Definitions:

Corollary

A proposition that follows from one already proven, a natural consequence or result.

Poles

In psychology, it can refer to the extremes of a personality dimension or trait, such as introversion/extroversion, where individuals can be positioned along a continuum.

Bandura

An influential psychologist known for his work on social learning theory, later called social cognitive theory.

Reciprocal Determinism

A concept in social cognitive theory proposed by Albert Bandura, suggesting that personal factors, behavior, and the environment interact and influence each other.