In a Recent Year Garvey Corporation Had Net Income of $100,000

question 245

Multiple Choice

In a recent year Garvey Corporation had net income of $100,000, interest expense of $20,000, and tax expense of $30,000. What was Garvey Corporation's times interest earned for the year?

• A) 5.00
• B) 6.00
• C) 6.50
• D) 7.50

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Definitions:

Sales Tax

A tax imposed by a government on the sale of goods and services, usually calculated as a percentage of the sales price.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of the product, like fuel, tobacco, and alcohol.

Per-Unit Basis

A method of expressing or measuring something in terms of a single unit or a fixed amount per unit.

Marginal Tax Rate

The rate at which the next dollar of taxable income is taxed, indicating how much of an additional dollar earned will be taken in taxes.