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(Calculating a leverage ratio) Logan Pendleton is contemplating starting a new firm that will provide background music for elevators, dentist offices, and the like. He estimates a positive NPV of $270,000 for the investment. Mr. Pendleton plans to call the firm Tarry- Tune, Unlimited. He estimates that the initial investment needed to start Tarry-Tune is $325,000. He plans to borrow $200,000 of the initial investment. What is the expected leverage ratio, L, for Tarry-Tune?

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Financial Management, Finance

Category:- Financial Management
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