Use the Table for the Question(s)below

question 32

Multiple Choice

Use the table for the question(s) below.
Consider the following income statement and other information:
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $ millions)
-Luther's EBIT coverage ratio for the year ending December 31,2018 is closest to:

• A)1.64.
• B)1.78.
• C)1.98.
• D)2.19.

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Definitions:

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how changes in income affect spending.

Saving

The portion of income not spent on current expenditures or consumption, often put aside for future use or investment.

Disposable Income

The amount of money a household has available for spending and saving after income taxes have been accounted for.

Consumption Function

A macroeconomic concept that describes the relationship between total consumption and gross national income.