The Records of Twain Company Include the Following What Is the Financial Leverage Percentage (Rounded to the Nearest

question 140

Multiple Choice

The records of Twain Company include the following: $$\begin{array} { | l | r | } \hline \text { Average total assets } & \$ 60,000 \\\hline \text { Average total liabilities } & 25,000 \\\hline \text { Total revenue } & 107,600 \\\hline \text { Total expense (including income tax) } & 104,000 \\\hline \text { Interest expense (included in total expenses) } & 2,000 \\\hline \text { Income tax rate 40\% } & \\\hline\end{array}$$ What is the financial leverage percentage (rounded to the nearest percent) ?

• A) 4%
• B) 5%
• C) 7%
• D) 9%

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Definitions:

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