Question

It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true?
Select all that apply. Select: 3
Total liabilities will be $139,957,681
Working capital will remain the same at $13,411,107
The total investment for Chester will be $12,689,419
Chester’s long-term debt will rise by $10,000,000
Total Assets will rise to $223,867,581

Answer 1