Arnot Corporation Reported $25,000 in Interest Expense on Loans of $312,500

question 2

Multiple Choice

Arnot Corporation reported $25,000 in interest expense on loans of $312,500, $120,000 in net income and $40,000 in income tax expense last year.What was their after-tax cost of borrowing and their interest coverage ratio for the year? $$\begin{array}{l}\begin{array} { c c c } &\text { After-tax }&\text {cost Interest }\\& \text { of borrowing } & \text { Coverage ratio } \\\hline \text { A) } & 6 \% & 7.4 \\\text { B) } & 6 \% & 12.5 \\\text { C) } & 8 \% & 7.4 \\\text { D) } & 8 \% & 12.5\end{array}\end{array}$$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Naturalistic Settings

Environments where behavior or phenomena occur naturally, without experimental manipulation or intervention by researchers.

Same-gender Conversations

Dialogues or discussions that occur between individuals of the same gender, potentially reflecting specific cultural, social, or personal dynamics.

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Unwanted disturbances or disruptions in a task or activity, often causing frustration and hindrance in achieving goals.

Conversation

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