Instead of increasing its long-term debt by borrowing money to purchase new stereo equipment, Jay's Jams Inc. decides to lease the equipment. How does this affect its long-term debt ratio?
It will decrease.
It will increase.
It will remain unchanged.
The effects are unknown without the amount of the lease obligation.
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Monday 4 March 2013
Instead of increasing its long-term debt by borrowing money to purchase new stereo equipment, Jay's Jams Inc. decides to lease the equipment. How does this affect its long-term debt ratio? It will decrease. It will increase. It will remain unchanged. The effects are unknown without the amount of the lease obligation.
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