A Firm Has Total Interest Charges of $10,000 Per Year

question 87

Multiple Choice

A firm has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. The firm's times interest earned ratio is:

• A)16 times.
• B)10 times.
• C)7 times.
• D)11 times.
• E)20 times.

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Definitions:

Developmental Period

Distinct phases in an individual's life characterized by specific physical, psychological, or emotional changes, often used to understand growth and development over time.

Young Adulthood

A life stage occurring after adolescence, typically involving individuals between the ages of 20 and 40, characterized by the exploration of personal and professional identities.

Regulate Behavior

The act of controlling or directing actions or conduct according to rules, norms, or laws.

Developmental Period

A phase in an individual's life characterized by specific types of growth or change.