Calculate the Times Interest Earned Ratio Given the Following Information

question 37

Multiple Choice

Calculate the times interest earned ratio given the following information: depreciation expense = $6,000; EBIT = $90,000; cash coverage ratio = 8 times.

• A) 8.0 times
• B) 7.5 times
• C) 7.0 times
• D) 6.5 times
• E) 6.0 times

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Definitions:

Equitable Estoppel

A legal principle preventing a party from asserting a claim or right which contradicts what they previously said or agreed to by their actions.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by all parties involved to be enforceable.

Improvements

Enhancements made to a property or goods that increase their value or utility.

Standard Construction Rule

A theory of legal interpretation under which the court will determine the principal objective of the parties in the making of the contract.