What would new debt ratio be if machine were leased

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Suncoast Healthcare is planning to acquire a new X-ray machine that costs $200,000. The business can either ease the machine using an operating lease or buy it using a loan from a local bank. Suncoast's balance sheet prior to acquiring the machine is as follows:

Current Assets $100,000 Debt $400,000

Net Fixed Assets 900,000 Equity 600,000

Total Assets $1,000,000 Total Claims $1,000,000

a. What is Suncoast's current debt ratio?

b. What would the new debt ratio be if the machine were leased? If it is purchased?

c. Is the financial risk of the business different under the two acquisition alternatives?

Reference no: EM131349247

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