Times Interest Earned Is Calculated By

question 71

Multiple Choice

Times interest earned is calculated by:

• A)Multiplying interest expense by income.
• B)Dividing interest expense by income before interest expense.
• C)Dividing income before interest expense and income taxes by interest expense.
• D)Multiplying interest expense by income before interest expense.
• E)Dividing income before interest expense by interest expense and income taxes.

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Definitions:

Business Failure

The cessation of operations and the closing of a business due to its inability to make a profit or cover its expenses, leading to financial losses for owners and investors.

Business Termination

When a business ceases operation for any reason.

Manufacturing Industry

The sector of the economy that is involved in the production of goods using raw materials and machinery.

Largest Number

Refers to the highest or most significant figure in a given set or range of numbers.