If a Company Used Some Cash and a Long-Term Loan

question 22

Multiple Choice

If a company used some cash and a long-term loan to buy land and a building, what would be the effect on the company's current ratio and debt-to-equity ratio?
$\begin{array}{ll}&\text { Current } & \text { Debt-to-Equity } \\&\text { Ratio } & \text { Ratio } \\A.&\text { increase } & \text { increase } \\B.&\text { increase } & \text { decrease } \\C.&\text { decrease } & \text { increase } \\D.&\text { decrease } & \text { decrease }\end{array}$

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

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