Use the Table for the Question(s) Below

question 34

Multiple Choice

Use the table for the question(s) below.
Luther Industries currently has the following balance sheet (in Thousands of dollars) :
Luther is about to add a new fleet of delivery trucks. The price of the fleet is $1.5 million.
-If Luther acquires the new fleet of delivery trucks using a capital lease, Luther's debt-to-equity ratio will be closest to ________.

• A) 0.66
• B) 1.5
• C) 0.80
• D) 2.0

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Definitions:

Days' Sales

A financial metric that measures the average number of days it takes a company to convert its inventory into sales.