What the best response that can give ima is

Assignment Help Financial Accounting
Reference no: EM132927836

Problem 1: Ima Broake is trying to expand her small business, Ima Fun Caterer. She has taken out a $10,000 loan for kitchen equipment and her company is currently worth $15,000. As her accountant, she has asked you about whether she can take on a new loan that the bank says she must have at least 25% equity in her business to obtain. The best response that you can give Ima is:

A. Ima can take out a loan of $10,000 as her company will then be worth $25,000 and the new $10,000 loan is less than 75% of the total value of the company.

B. The liquidity ratio shows that Ima Fun Caterer can take on an additional $5,000 in loans as long as the loans are not due in full for five more years.

C. Ima's debt to equity ratio is 66.7% so the bank will only approve an additional $1,125 as Ima's equity will then equal 25%.

D. Ima's debt to equity ratio is currently 150% so the bank will not approve any new loans for the business.

Reference no: EM132927836

Questions Cloud

Features of the globalization theory industrial : Briefly discuss points/features of the 'Globalization theory' Industrial/ of employment relations? Give examples from any overseas and Pacific Island country to
What should uzair do : The euro will continue to slide in value against the U.S. dollar, and he expects the spot rate to be USD0.800/EUR at the end of 30 days, what should he do?
Explain barrier to creative thinking : Which of the following is a barrier to creative thinking?
Explain the investment risks when invest in the money market : Explain the investment risks when invest in the money market. The money market is one of investment component in the economy
What the best response that can give ima is : What The best response that can give Ima is? Ima Broake is trying to expand her small business, Ima Fun Caterer. She has taken out a $10,000 loan
What the best feedback you can give madeline is : What the best feedback can give Madeline is? In addition to paying her current invoices, Madeline can go ahead and make advance purchases of more supplies
Importance and benefits of emotional intelligence : Communicate the importance and benefits of emotional intelligence in emotional regulations for customers assistants at marks and spencer.
Describe the principles and processes of conflict management : Describe the principles and processes of conflict management.
Describe how the animals felt after the first harvest : Describe how the animals felt after the first harvest. Had the work habits or behavior of all the animals changed after the rebellion?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd