The Current Balance Sheet of Handyman Inc

question 57

Multiple Choice

The current balance sheet of Handyman Inc.reports total assets of $20 million, total liabilities of $2 million, and owners' equity of $18 million.Handyman Inc.is considering several financing possibilities in order to expand operations.
What is the additional amount that Handyman Inc.can borrow and not exceed a debt to equity ratio of 0.3?

• A)$5.4 million
• B)$3.4 million
• C)$5.5 million
• D)$4.0 million

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Definitions:

Isotonic Intravenous Therapy

IV fluid administration that has the same salinity as the body’s blood and plasma, typically used to maintain fluid balance.

Sodium Chloride

A chemical compound commonly known as salt, used in various applications including food seasoning and medical therapies.

Vomiting

The involuntary, forceful expulsion of the contents of the stomach through the mouth.

Blood Transfusion

The act of moving blood or blood components from one individual to the blood circulation of another person.