Use the Table for the Question(s)below

question 68

Multiple Choice

Use the table for the question(s) below.

-Consider the above balance sheet for your firm (in thousands of dollars) .You plan on acquiring some new equipment using a $700,000 finance lease.If you go through with the lease,what will be the change in your firm's debt-equity ratio?

• A)0.44
• B)0.56
• C)0
• D)0.80
• E)1.69

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Definitions:

Progressive Tax

A tax in which the average tax rate rises with income. People with higher incomes will pay a higher percentage of their income in taxes.

Proportional Tax

A tax in which the average tax rate is the same at all income levels. Everyone pays the same percentage of income in taxes.

Regressive Tax

A tax in which the average tax rate falls with income. People with higher incomes will pay a lower percentage of their income in taxes.

Neutral Tax

A tax system that is designed to have a neutral impact on the economic choices and behaviors of individuals and businesses, not favoring one decision over another.