A Company Has Current Assets of $5 Million and Net

question 126

Multiple Choice

A company has current assets of $5 million and net income of $10 million.Current liabilities total $2.5 million,interest expense is $2 million,and income tax expense is $3 million.What is the times interest earned ratio for this company?

• A) 0.5
• B) 7.5
• C) 0.3
• D) 2.0

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Definitions:

Agnosia

A neurological disorder that results in the inability to recognize and identify objects, people, or sounds, despite having the necessary sensory function.

Aphasia

A condition characterized by the loss or impairment of the ability to produce and/or comprehend language, typically due to brain damage.

Avolition

Inability to persist at common goal-directed activities.

Mild Memory Loss

A slight but noticeable decrease in memory capabilities, often seen as a normal part of aging, but can also be an early sign of cognitive decline.