A Total Debt Ratio of .35

question 54

Multiple Choice

A total debt ratio of .35:

• A) indicates that the firm is financed with 35% long-term debt.
• B) would exist if a firm had liabilities of $700 and assets of $2,000.
• C) indicates that 35 cents of every dollar of capital is in the form of short-term debt.
• D)indicates that 35 cents of every dollar of capital is in the form of long-term debt.

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Definitions:

Product Cost

The total cost associated with making or acquiring a product, including materials, labor, and overhead costs.

Variable Cost

Costs that change in proportion to the level of production or business activity.

Markup Percentage

The percentage increase between the cost to produce or purchase a product and its selling price.

Product Cost Concept

An accounting approach that includes costs directly associated with manufacturing a product, including raw materials, labor, and overhead expenses.