Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. santana rey has consulted with her local banker an

Santana Rey has consulted with her local banker and is considering financing an expansion of...

60.1K

Verified Solution

Question

Accounting

image
image
Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2018, for Business Solutions follow Total assets $120.868 Total liabilities $869 Total equity $119,999 Required: 1. The bank has offered a long-term secured note to Business Solutions. The bank's loan procedures require that a client's debt-to- equity ratio not exceed 0.86. As of March 31, 2018, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations to the nearest dollar amount.) Maximum amount 2. Assume Business Solutions borrows the maximum amount allowed from the bank. (a) What percentage of assets would be financed by debt? (Round your intermediate dollar values to the nearest whole number and final answer to 1 decimal place.) Percentage of assets financed by debt (b) What percentage of assets would be financed by equity? (Round your intermediate dollar values to the nearest whole number and final answer to 1 decimal place.) Percentage of assets financed by equity

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students