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Evaluate and discuss the level of risk

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Question: Ramirez Company is considering a project that will require a $500,000 loan. It presently has total liabilities of $220,000, and total assets of $620,000.

1. Compute Ramirez's

(a) present debt-to-equity ratio and

(b) the debt-to-equity ratio assuming it borrows $500,000 to fund the project.

2. Evaluate and discuss the level of risk involved if Ramirez borrows the funds to pursue the project.

Reference no: EM131534716

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