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.

---

Definitions:

Capacity Increment

The addition or increase in a system's or facility's ability to produce goods or services.

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Drum

In production and project management, often refers to the constraint or bottleneck resource that dictates the pace at which a process can run.

Buffer

A zone of protection or safety margin that reduces the risk of fluctuations or uncertainties affecting the primary system or process.