Problem related to long-term debt


For the year ending June 30, 2008, the Austin Corporation has current assets of $ 275,000 and total assets of $ 900,000. It also has current liabilities of $ 150,000, equity of $ 200,000, and retained earnings of $ 100,000. The marginal tax rate for the firm is 30%. How much long-term debt does the firm have?

a) $ 250,000

b) $ 350,000

c) $ 315,000

d) $ 450,000

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Operation Management: Problem related to long-term debt
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