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Multiple Choice

[The following information applies to the questions displayed below.]
The current balance sheet of Apex reports total assets of $20 million,total liabilities of $2 million,and owners' equity of $18 million.Apex is considering several financing possibilities in order to expand operations.Each question based on this data is independent of any others.
-What will be the effect on Apex's debt ratio if Apex's owner invests an additional $2 million to finance its expansion?

A) The debt ratio will decrease from 0.1 (2 ÷ 20) to 0.0909 (2 ÷ 22) after the additional investment.
B) The debt ratio will decrease from 2 ÷ 9 before to 2 ÷ 11 after the additional investment.
C) The debt ratio will increase from 20 before to 22 after the additional investment.
D) Additional investment by owner will have no effect on the debt ratio.