Salut Wine and Spirits Company's Total Assets Equal $18 Million

question 1

Multiple Choice

Salut Wine and Spirits company's total assets equal $18 million.The book value of Salut's equity is $6 million.Excess cash is $200,000.The market value of Salut's equity is $10 million.Its Debt to Enterprise Value ratio is .5.What is the book value of Salut's interest- bearing debt?

• A)$5 .25million
• B)$10.2 million
• C)$15 million
• D)$20.4 million

---

Definitions:

Ethylene Glycol

A toxic organic compound commonly used as an automotive antifreeze and a precursor to polymers.

1,2-Ethanediol

A chemical compound commonly known as ethylene glycol, used as an antifreeze and precursor to polymers.

Propanoic Acid

A colorless, oily liquid with a pungent odor, used in the manufacture of various chemicals, including as a preservative.

Osmosis

The movement of water molecules through a semi-permeable membrane from a region of low solute concentration to a region of high solute concentration to equalize the concentrations on both sides of the membrane.