Krast Company Has Total Assets of $160,000 and Total Liabilities

question 141

Multiple Choice

Krast Company has total assets of $160,000 and total liabilities of $70,000.The company's debt-to-equity ratio is closest to:

• A)0.56
• B)0.44
• C)0.30
• D)0.78

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Definitions:

Von Neuman-Morgenstern

Refers to the theory of expected utility, formulated by John von Neumann and Oskar Morgenstern, which addresses choices made under conditions of risk.

Expected Utility Function

A mathematical expression that represents a consumer's preference for uncertain outcomes, weighting each outcome by its probability of occurrence.

Von Neuman-Morgenstern Utility Function

A utility function that accounts for the existence of risk and uncertainty, allowing for the calculation of expected utility.

Wealth

The total value of all assets owned by an individual, community, company, or country, minus any liabilities.