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Sadik Industries must install $300 of new machinery in its Texas plant. It can either lease the equipment or obtain a bank loan for 100% of the required amount and buy the equipment. If the equipment is leased, the lease would not need to be capitalized. Sadik Industries's balance sheet prior to the acquisition of the equipment is as follows:

Current assets: $300

Net fixed assets: $500

Debt: $200

What would be the company's debt ratio, in percentages, if it purchased the equipment?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91601015

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