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21 December, 12:02

Duke Company has net fixed assets of $400,000, short-term liabilities of $30,000, long-term liabilities of $20,000, common stockholders' equity of $90,000, and total stockholders' equity of $100,000 (including the common). Duke's ratio of fixed assets to long-term liabilities is a. 8%. b. 20. c. 8. d. 20%.

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Answers (1)
  1. 21 December, 13:48
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    option (b) 20

    Explanation:

    Data provided in the question:

    Net fixed assets = $400,000

    Short-term liabilities = $30,000

    Long-term liabilities = $20,000

    Common stockholders' equity = $90,000

    Total stockholders' equity = $100,000

    Now,

    Ratio of fixed assets to long term liabilities

    = Net Fixed assets : Long term liabilities

    or

    = $400,000 : $20,000

    = 20

    Hence,

    The correct answer is option (b) 20
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