If a Firm Has Interest Expenses of $10,000 Per Year

question 9

Multiple Choice

If a firm has interest expenses of $10,000 per year, sales of $700,000, a tax rate of 40%, and a net profit margin of 7%, what is the firm's times interest earned ratio (round to two decimals) ?

• A) 8.17
• B) 4.90
• C) 13.25
• D) 9.17

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Definitions:

Response Tendencies

Patterns or predispositions in the way individuals react to certain stimuli or situations, often influenced by psychological factors.

B.F. Skinner

An American psychologist best known for his work in behaviorism and the development of the theory of operant conditioning.

Stimulus Situations

Specific environments or scenarios in which particular stimuli are presented to invoke a reaction or response.

Psychodynamic Theories

Psychological theories that emphasize the influence of the unconscious mind on behavior and personality development.