Instead of Increasing Its Long-Term Debt by Borrowing Money from a Bank

question 37

Multiple Choice

Instead of increasing its long-term debt by borrowing money from a bank to purchase new stereo equipment,Jay's Jams Inc.decides to lease the equipment on a long-term basis.How will the long-term debt ratio differ if the lease option is selected over the bank-debt option?

• A) The ratio will be lower under the leasing option.
• B) The ratio will be higher under the leasing option.
• C) The ratio will be the same regardless of the financing method selected.
• D) The ratio effects are unknown without the amount of the lease obligation.

---

Definitions:

Infants

Very young children, typically under one year of age, who are in the early stages of development.

Bedtime Ritual

A set of consistent activities or routines performed before going to bed, aiding in the transition to sleep.

Bedtime Snack

A small meal or food item consumed before sleeping, often aimed at managing hunger or blood sugar levels throughout the night.

Parasomnia Disorder

A type of sleep disorder involving unwanted events or experiences that occur while falling asleep, sleeping, or waking up.