Use the Table for the Question(s)below

question 11

Essay

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.
-What will Luther's balance sheet look like if they acquire the new fleet of delivery trucks using a capital lease?

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Definitions:

New Shares

Additional stock issued by a company, potentially diluting the ownership percentage of existing shareholders.

Dividend Income

Earnings obtained by holding company shares, typically dispensed from the firm's earnings.

Optimal Dividend Policy

The best strategy a company can adopt for the payment of dividends, balancing between retaining earnings for growth and satisfying shareholders.

Residual

The amount remaining after the greater part has been deduced; in finance, often refers to the residual value or remaining interest in an asset.