A Company Has Current Assets of $5 Million and Net

question 72

Multiple Choice

A company has current assets of $5 million and net income of $10 million.Current liabilities total $2.5 million,interest expense is $2 million,and income tax expense is $3 million.The times interest earned ratio for this company is:

• A)0.5.
• B)7.5.
• C)0.3.
• D)2.0.

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Definitions:

Endoderm

Innermost primary tissue layer of an animal embryo that gives rise to the linings of the digestive tract and associated structures.

Germ Layer

Primary tissue layer of a vertebrate embryo—namely, ectoderm, mesoderm, or endoderm.

Ectoderm

Outermost primary tissue layer of an animal embryo; gives rise to the nervous system and the outer layer of the integument.

Differentiate

To recognize or ascertain what makes something or someone different, or in biology, the process by which cells or tissues change from relatively generalized to specialized kinds, during development.