Robert Sage has a negative cash balance of $5,000, total assets of $321,000, and total liabilities of
Question:
Robert Sage has a negative cash balance of $5,000, total assets of $321,000, and total liabilities of $150,000. Robert would like to borrow some cash from his sister Ana who has cash of $25,000 and total liabilities plus net worth of $200,000. Ana's only liability is related to unpaid accounts for $55,000. This borrowing should only be done if Ana's net worth is more than Robert's. Which one of the following statements best applies here?
a. Ana should not lend money to Robert as her net worth is less than his by $26,000.
b. Ana should lend money to Robert as her net worth is more than his by $145,000.
c. Ana should not lend money to Robert as her net worth is more than his by $20,000.
d. Ana should not lend money to Robert as her net worth is less than his by $95,000.
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta