A Firm Has EBIT of $400,000 and Depreciation Expense of $20,000

question 112

Multiple Choice

A firm has EBIT of $400,000 and depreciation expense of $20,000. Fixed charges total $50,000. Interest expense totals $7,000. What is the firm's fixed-charge coverage ratio?

• A) 7.60 times
• B) 8.00 times
• C) 8.40 times
• D) 8.54 times

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Definitions:

Autonomy

The capacity to make an informed, uncoerced decision independently, often used in the context of moral, ethical, or self-governing practices.

Period of Rebellion

A phase, often in adolescence, characterized by increased resistance against authority and societal norms as a way of seeking individual identity.

Personal Fable

A belief held by adolescents that they are unique and invulnerable, often leading to risk-taking behaviors.

Imaginary Audience

A belief of adolescents that they are or will be the focus of attention in social situations and that others will be as critical or approving as they are of themselves.