Flash in the Pan Cooking School Is Considering the Issuance

question 91

Multiple Choice

Flash In The Pan Cooking School is considering the issuance of additional long-term debt to finance expansion.At the present time the company has $160 million of 10% debentures outstanding.Its after-tax net income is $48 million, and the company's (marginal) income tax rate is 40%.The company is required by the debenture holders to maintain its coverage ratio at 4.0 or greater.Determine Flash's present coverage ratio.

• A)3.33
• B)2.78
• C)5.00
• D)6.00

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Definitions:

Employment At Will

A legal doctrine that means an employer can terminate an employee at any time for any reason, except an illegal one, or no reason without incurring legal liability.

Occupational Safety

Policies, practices, and procedures implemented to protect individuals from risks and hazards in the workplace.

OSHA

The Occupational Safety and Health Administration, a federal agency tasked with ensuring safe and healthy working conditions for employees by setting and enforcing standards.

Title VII

A section of the Civil Rights Act of 1964 prohibiting employment discrimination based on race, color, religion, sex, or national origin in the United States.