Herman's Bar and Grill Paid $1,618 in Interest and $265

question 194

Multiple Choice

Herman's Bar and Grill paid $1,618 in interest and $265 in dividends last year. The times interest earned ratio is 1.9 and the depreciation expense is $50. What is the value of the cash coverage ratio?

• A) 1.62
• B) 1.87
• C) 1.93
• D) 1.99
• E) 2.11

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Definitions:

Inventories

Assets held for sale, in the process of production for sale, or in the form of materials or supplies to be consumed in the production process.

Physical Capital Concept

The view that capital is a tangible asset, such as equipment or machinery, that is used in the production of goods and services.

Operating Capability

An entity's capacity to maintain the quality and level of its operations and services, often through efficient use and management of resources.