A Firm Has Total Interest Charges of $10,000 Per Year,sales

question 105

Multiple Choice

A firm has total interest charges of $10,000 per year,sales of $1 million,a tax rate of 40 percent,and a net profit margin of 6 percent.What is the firm's times-interest-earned ratio?

• A) 16 times
• B) 10 times
• C) 7 times
• D) 11 times
• E) 20 times