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

question 130

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 cash coverage ratio?

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

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Definitions:

Responsive

Being quick to react or respond positively or effectively to some form of input or stimulation, such as a question, request, or change in environment.

Higher-income Families

Families with financial earnings substantially above the average, often associated with greater access to resources, education, and health care.

Child Care Arrangements

The methods or plans put in place by parents or guardians to look after children, which can include daycare, nannies, or family care.

Lower Income Families

Refers to families living on earnings that fall below the median income level for their area, often facing financial challenges.