Fibonacci Property Management's Balance Sheet Shows Total Liabilities of $5

question 12

Multiple Choice

Fibonacci Property Management's balance sheet shows total liabilities of $5 million and total assets of $13 million.Interest bearing liabilities total $3 million (book value) .The market value of Fibonnacci's equity is $21 million.Fibonacci's debt ratio is ________.

• A).38
• B).23
• C).125
• D).24

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Definitions:

Relevant Range

The range of activity or volume over which the assumptions about fixed and variable cost behavior are valid.

Fixed Costs

Costs that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.

Cost Behaviour

Cost behavior is the manner in which a cost changes as the related activity level or volume changes, typically classified into fixed, variable, and mixed costs.

Cost Estimation

The process of forecasting the likely costs of a project or production, based on various factors and historical data.