If the Debt Ratio Is Too High,the Company May Be

question 156

True/False

If the debt ratio is too high,the company may be unable to pay its debts.

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Definitions:

Unadjusted Rate

A rate or measure that has not been modified to account for factors or variables that could affect its interpretation or accuracy.

Required Rate of Return

The minimum return an investor expects to achieve by investing in a particular asset or project, considering the risk involved.

Net Present Value

A method in capital budgeting that calculates the present value of cash flows generated over a project's life, subtracting the initial investment.

Payback Technique

A method of investment appraisal that calculates the time required to recoup the cost of an investment.