Use the following information to answer the next two questions: Operating assets = $3,000 Operating liabilities = $1,000 Book value of debt = Market value of debt = $1,500 Book value of equity = $500 Market value of equity = $900 Value of operating leases = $2,000 After-tax cost of debt = 6% Cost of equity = 13% What are (1) invested capital before adjustment for leases and (2) invested capital after adjustment for leases? a) Invested capital before adjustment for leases = $2,000; invested capital after adjustment for leases = $4,000. b) Invested capital before adjustment for leases = $4,000; invested capital after adjustment for leases = $3,000. c) Invested capital before adjustment for leases = $2,000; invested capital after adjustment for leases = $3,000. d) Invested capital before adjustment for leases = $4,000; invested capital after adjustment for leases = $4,000
Accounting
Use the following information to answer the next two questions:
Operating assets = $3,000
Operating liabilities = $1,000
Book value of debt = Market value of debt = $1,500
Book value of equity = $500
Market value of equity = $900
Value of operating leases = $2,000
After-tax cost of debt = 6%
What are (1) invested capital before adjustment for leases and (2) invested capital after adjustment for leases?
a) Invested capital before adjustment for leases = $2,000; invested capital after adjustment for leases = $4,000.
b) Invested capital before adjustment for leases = $4,000; invested capital after adjustment for leases = $3,000.
c) Invested capital before adjustment for leases = $2,000; invested capital after adjustment for leases = $3,000.
d) Invested capital before adjustment for leases = $4,000; invested capital after adjustment for leases = $4,000.
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