If Luther acquires the new fleet of delivery trucks using a capital lease, Luther's debt-to-equity ratio will be closest to ________
Luther Industries currently has the following balance sheet (in Thousands of dollars):
Assets Liabilities
Cash $500 Debt $4,500
Property, Plant, and Equipment $7,000 Equity $3,000
Total Assets $7,500 Total Debt plus Equity $7,500
Luther is about to add a new fleet of delivery trucks. The price of the fleet is $1.5 million.
A) 0.66
B) 1.5
C) 0.80
D) 2.0
Answer: D
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