Karma Company Has Total Assets of $190,000 and Total Liabilities

question 165

Multiple Choice

Karma Company has total assets of $190,000 and total liabilities of $90,000.The company's debt-to-equity ratio is closest to which of the following?

• A) 0.32 to 1.
• B) 0.47 to 1.
• C) 0.53 to 1.
• D) 0.90 to 1.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and disposal.

Present Value

The present value of a future amount of money or series of cash flows, assuming a certain return rate.

Replacement Cost

The current cost of replacing an asset with a new one of similar kind and quality, used in accounting to value assets.

Settlement Amount

A financial sum agreed upon by parties in a contract, often referring to the resolution amount in disputes or the completion payment in transactions.