The Calculation of the Number of Times Interest Is Earned

question 24

Multiple Choice

The calculation of the number of times interest is earned involves dividing

• A) net income by annual interest expense.
• B) net income plus income taxes by annual interest expense.
• C) net income plus income taxes and interest expense by annual interest expense.
• D) none of these answers are correct.

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Definitions:

Mechanistic

An approach in understanding phenomena that involves breaking down complex systems into simpler parts to explain how they work.

Rigidly Defined

Described or specified with strictness and inflexibility.

Flexible

Capable of bending easily without breaking; adaptable to change or capable of being modified to suit different conditions or uses.

Natural Selection

A fundamental mechanism of evolution where organisms better adapted to their environment tend to survive and produce more offspring.