Use the Following Information to Answer the Next Question

question 20

Multiple Choice

Use the following information to answer the next question:
Operating assets = $3,000
Operating liabilities = $1,000
Book value of debt = Market value of debt = $1,500
Book value of equity = $500
Market value of equity = $900
Value of operating leases = $2,000
After-tax required return on unsecured debt = 6%
Required return on equity (CAPM ) = 13%
After-tax required return on secured debt = 5%
-What are (1 ) invested capital before adjustment for leases and (2 ) invested capital after adjustment for leases?

• A)Invested capital before adjustment for leases = $2,000;invested capital after adjustment for leases = $4,000.
• B)Invested capital before adjustment for leases = $4,000;invested capital after adjustment for leases = $3,000.
• C)Invested capital before adjustment for leases = $2,000;invested capital after adjustment for leases = $3,000.
• D)Invested capital before adjustment for leases = $4,000;invested capital after adjustment for leases = $4,000.

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Definitions:

Communication

The exchange of information or messages between individuals through various channels and mediums.

Inspirational Workplace

An inspirational workplace is one that motivates individuals to achieve their best and fosters positive attitudes and creativity.

Conflicts

Situations where interests, needs, goals, or values of involved parties interfere with one another.

Subordinates

Individuals who work under the supervision of someone else in an organizational hierarchy.