The Interest-Coverage Ratio Is Calculated as

question 23

Multiple Choice

The interest-coverage ratio is calculated as

• A)(net income - taxes - interest - depreciation)÷ interest.
• B)(net income + taxes - interest - depreciation)÷ interest.
• C)(net income + interest + depreciation)÷ interest.
• D)(net income + taxes + interest + depreciation)÷ interest.

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Definitions:

Collude Effectively

To engage in a secret agreement or cooperation among parties, often competitors, for a deceitful or illegal purpose, such as fixing prices or rigging markets.

Pure Monopoly

describes a market structure where a single company has exclusive control over the supply of a product or service, with no close substitutes.

Cartel Agreement

An arrangement among competing firms to control prices or output in a market, often to limit competition.

Cartelized Market

A market situation where a small number of firms collaborate to control prices and production, limiting competition.