Assume the Following Data: Long-Term Debt = 100; Value of Leases

question 21

Multiple Choice

Assume the following data: Long-term debt = 100; Value of leases = 20; Book value of equity = 80. Calculate the debt ratio.

• A)0.50
• B)0.55
• C)0.56
• D)0.60

---

Definitions:

Financial Stability

The condition in which an organization or individual has a strong financial foundation, characterized by solvency, adequate liquidity, and low levels of debt, enabling endurance through economic fluctuations.

Viability

The ability of a project, idea, or entity to work successfully and sustainably.

Life Cycles

The series of changes in the life of an organism or product, including birth or inception, growth, maturity, and decline or death.

Entrepreneurships

The act of creating, designing, and running new businesses, often characterized by risk-taking and innovation, in pursuit of opportunity and profit.