The liabilities and owners equity for Campbell Industries is as follows: Accounts payable ........$ 500,000 Notes payable
Question:
The liabilities and owners’ equity for Campbell Industries is as follows:
Accounts payable ........$ 500,000
Notes payable ........ 250,000
Current liabilities .........$ 750,000
Long-term debt ........$1,200,000
Common equity ........$5,000,000
Total liabilities and equity ....$6,950,000
a. What fraction of the firm’s assets does the firm finance using debt (liabilities)?
b. If Campbell were to purchase a new warehouse for $1 million and finance it all using long-term debt, what would happen to the firm’s debt ratio?
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Here is Campbell Industries current situation A Even though we werent given the firms total asset va...View the full answer
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Related Book For 
Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin
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