Delavan Company Has Fixed Assets of $5 Billion, Current Assets

question 130

Multiple Choice

Delavan Company has fixed assets of $5 billion, current assets of $2 billion, long-term liabilities of $2 billion, current liabilities of $1 billion, and owners' equity of $2 billion. What is Delavan's debt-to-equity ratio?

• A) 1.5
• B) 0.9
• C) 1.2
• D) 0.4
• E) 0.8

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Definitions:

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Jointly Controlled Operation

A joint operation where the parties that have joint control of the operation have rights to the assets, and obligations for the liabilities, relating to the arrangement.

Cash Position

A company's total cash and liquid assets minus its liabilities.

Joint Venturer

is an entity that engages in a joint venture, sharing control, resources, and risks with other ventures.