Below Is Information for Year Ended 12/31/05 for Company a and Company

question 39

Multiple Choice

Below is information for year ended 12/31/05 for Company A and Company B. $\begin{array}{lrr}&\text { Company A }&\text { Company B }\\\text { Interest expense } & \$ 400 & \$ \\\text { Tax expense }(40 \%) & 400 & 400 \\\text { Net income } & 600 & 600 \\\text { Total assets }-12 / 31 / 05 & 10,000 & 10,000 \\\text { Total debt } & 5,000 & 0 \\\text { Equity } & 5,000 & 10,000\end{array}$
-Financial leverage ratio for Company A and B for 2005 are: $\begin{array}{lll}&\text { Company A }&\text { Company B }\\\text { A) } & 2.00 & 0.0 \\\text { B) } & 1.00 & 0.0 \\\text { C) } & 0.70 & 0.6 \\\text { D) } & 0.50 & 1.0\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Reasonable Income

An earnings level considered sufficient to cover basic living expenses while allowing for some discretionary spending, varying by geographical location and individual needs.

Anti-anxiety Medications

Drugs designed to prevent, reduce, or alleviate the symptoms of anxiety in individuals.

Female Nurses

Professional nursing practitioners who are female, providing a range of healthcare services, including patient care, health education, and emotional support, within various medical settings.

Comfort

A state of physical and emotional ease, often achieved through being in a safe or relaxed environment.