Which of the Following Is Considered a Good/safe Rule-Of-Thumb Debt

question 121

Multiple Choice

Which of the following is considered a good/safe rule-of-thumb debt ratio for businesses?

• A) 1.5 or above
• B) .6 or below
• C) 1.0 or above
• D) .8 or below

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Definitions:

Gain On Disposal

The profit realized from the sale of a fixed asset, such as machinery or real estate, above its book value.

Accumulated Depreciation

Refers to the total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the asset's wear and tear over time.

Batting Cages

An enclosed area for baseball or softball players to practice batting, usually equipped with a pitching machine.

Trademark

A name, term, or symbol used to identify a business and its products.