The Following Amounts Were Taken from the Financial Statements of R.Dodd

question 59

Multiple Choice

The following amounts were taken from the financial statements of R.Dodd Company: $\begin{array}{lrr}&2021&2020\\\text { Current liabilities } & \$ 1,280,000 & \$ 1,220,000 \\\text { Long-term liabilities } & 1,800,000 & 1,600,000 \\\text { Interest expense } & 100,000 & 50,000 \\\text { Income tax expense } & 50,000 & 30,000 \\\text { Net income } & 300,000 & 170,000 \\\text { Net cash provided by operating activity } & 325,000 & 270,000\end{array}$ The times interest earned for 2021 is

• A)3.0 times.
• B)3.5 times.
• C)4.0 times.
• D)4.5 times.

---

Definitions:

Horizontal Market

A market that appeals to a wide range of consumers across different industries or sectors.

Contestable Market

A market with no barriers to entry or exit, where a company's prices and output are constrained by the threat of new entrants or competition rather than by existing competitors alone.

Public Interest Theory

A theory suggesting that regulations are created in response to the public's demand for fair and efficient markets.

Industrial Regulation

The older and more traditional type of regulation in which government is concerned with the prices charged and the services provided to the public in specific industries. Differs from social regulation.