A Times Interest Earned Ratio of 11 Means That the Company's

question 53

Multiple Choice

A times interest earned ratio of 11 means that the company's:

• A)net income is large enough to pay interest and taxes 11 times.
• B)net cash flow from operations before taxes and interest is large enough to pay interest and taxes 11 times.
• C)net cash flow from operations is large enough to pay interest and taxes 11 times.
• D)income before taxes and interest is large enough to pay interest 11 times.

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Definitions:

Governmental Purchases

Expenditures made by the government for goods and services that are used to provide public services.

Domestic Output

The total value of all goods and services produced within a country's borders in a given time period.

Transfer Payments

Payments made by governments to individuals or other entities without requiring a good or service in return, such as welfare or social security payments.

Government Purchases

Expenditures by the government sector on final goods and services in a given period.