Montreal Brewing Company Has an Outstanding Debt of $20 Million

question 83

Multiple Choice

Montreal Brewing Company has an outstanding debt of $20 million.One-tenth of the company debt bears an interest cost of 8.0% and the balance costs 6.0%.If their earnings before taxes are $5.2 million, then their times-interest-earned ratio would be:

• A)3.2
• B)4.2
• C)5.2
• D)None of the above

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