If a Firm Has Both a Fixed Interest Expense and Fixed

question 48

Multiple Choice

If a firm has both a fixed interest expense and fixed lease payments,

• A) times interest earned ratio will be smaller than fixed charge coverage ratio.
• B) times interest earned ratio will be greater than fixed charge coverage ratio.
• C) times interest earned ratio will be the same as fixed charge coverage ratio.
• D) fixed charge coverage ratio cannot be computed.

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Definitions:

Training

The process of enhancing the skills, knowledge, and competencies of employees to perform specific jobs.

Equity Theory

An individual’s perception of fair and equitable treatment.

Expectancy Theory

The process people use to evaluate the likelihood that their efforts will yield the results they want, along with the degree to which they want those results.

Fair Treatment

The practice of treating all individuals equally, without bias or discrimination, in various contexts.