Question

Orem Corporation's current liabilities are $75,000, its long-term liabilities are $225,000, and its working capital is $100,000. If the corporation's debt-to-equity ratio is 0.30, total long-term assets must equal: Multiple Choice $1,000,000 $1,300,000 $1,125,000 $1,225,000

          Orem Corporation's current liabilities are $75,000, its long-term liabilities are $225,000, and its working capital is $100,000. If the corporation's debt-to-equity ratio is 0.30, total long-term assets must equal:

Multiple Choice

$1,000,000
$1,300,000
$1,125,000
$1,225,000

Orem Corporation's current liabilities are 75,000, its long-term liabilities are225,000, and its working capital is 100,000. If the corporation's debt-to-equity ratio is 0.30, total long-term assets must equal:

Multiple Choice1,000,000
1,300,0001,125,000
1,225,000

Added by Alan S.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Madhur L

07/12/2023

Step 1

The equity ratio is given as 0.30, which means that equity is 30% of total assets. Therefore, equity can be calculated as: Equity = Total Assets * Equity Ratio Equity = Total Assets * 0.30 Show more…

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