Use the Table for the Question(s)below

question 26

Multiple Choice

Use the table for the question(s) below.
Consider the following balance sheet:
-When using the book value of equity,the debt to equity ratio for Luther in 2019 is closest to:

• A)0.43.
• B)2.29.
• C)2.98.
• D)3.57.

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Definitions:

Escalation Lease

A lease agreement that includes provisions for rent increases over the lease term.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

A Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset in exchange for payment over a specified period.

Gross Lease

A lease in which the monthly payment made by the tenant remains the same and the landlord pays the operating expenses of the building.